James Purnell: Yes, that is absolutely right. We commissioned Dame Carol Black to consider that issue, and her report of last week gives us a good way forward to doing exactly that. We will continue to reform incapacity benefit, which we are committed to abolishing. In October, we will introduce the new employment and support allowance, which will be based on what people can do rather than what they cannot. That very much includes people with mental health problems. We are considering how we and the NHS can ensure that we give them the support to get them back into work.

Ann McKechin: As my right hon. Friend will be aware, it is also important that we have appropriate complementary policies as regards child care and early intervention. I understand that he will soon visit Scotland and very much hope that he will be able to visit Glasgow, where there are a number of very successful projects. Will he ensure that he clearly puts the message across to the Scottish National party Administration that they need urgently to consider their refusal to promise all vulnerable two-year-olds a place in nursery school, which had been promised by the previous Labour Administration, and that they need to do much more in prioritising child care support, which has received little attention?

Stephen Timms: These are matters that advisers will be able to take account of. It is important that lone parents should be able to be good parents as well as enjoy the benefits of employment. There is clear evidence not only that families are better off when a parent is in work, but that their children's well-being is improved.

Ben Chapman: Although I commend Jobcentre Plus on the progress that it has made and on the targets that it has met, 5 per cent. of unanswered calls cut off with a message saying "Ring back later" is still a lot of people. Given that they are people desperately seeking work, when can we eliminate the 5 per cent. unanswered rate?

Jim Sheridan: I thank my hon. and learned Friend for that response. He will be aware that Glasgow city council recently announced that any school leaver wishing to take up an apprenticeship will be guaranteed that option, but that will only work if local employers and the elderly work force play their part. Some elderly skilled members of the work force currently on disablement benefit are more than capable of passing on their skills and talents to future generations. Will my hon. and learned Friend agree to meet like-minded Labour colleagues to talk through the issues, so that we make sure that people who have skills pass them on but do not lose their benefits?

Graham Allen: Does the Secretary of State agree that local strategic partnerships have an important role in bringing together health, skills, children's services, and communities and neighbourhoods? Does he agree that such linking and joined-up work is necessary at national level too, involving Departments other than his own and relating to housing in particular? The new proposals to enable single parents in socially registered housing who are using the foyer scheme to return to work is one of the most important initiatives that I hope the Secretary of State will be able to encourage—and will he also ensure that he makes the time to visit Nottingham?

Anthony Steen: If the Home Office has its way, migrant domestic workers will have a non-renewable six-month visa and will be unable to change employers. Is that not a recipe for increasing domestic abuse and trafficking? If the women come forward, they will be sent back home; and they cannot get another job because will have only a non-transferable six-month visa. For a Government who are supposedly committed to stamping out trafficking, is that not an extraordinary proposal from the Home Office? Will the Minister do something about it?

Jim Fitzpatrick: I thank the hon. Member for Chipping Barnet (Mrs. Villiers) for providing the opportunity to make a statement on the problems occurring for passengers at Heathrow's terminal 5. The Secretary of State sends her apologies for being unable to respond to the question herself, but she is on a pre-arranged regional visit; I believe that the hon. Lady and the hon. Member for Lewes (Norman Baker) are aware of that.
	Heathrow's new terminal 5 opened to the public on Thursday 27 March. The terminal is operated by BAA plc, but British Airways is the sole airline using it. On 27 March, BA moved to T5 the majority of its short haul operations, which accounts for about 400 flights per day and some 34,000 passengers.
	The management of terminal 5 is an operational matter for British Airways and BAA, but that does not mean that the Government are not taking a keen interest in seeing that the difficulties T5 has faced since it opened last week are addressed and resolved as quickly as possible. On it first day in operation, T5's bespoke baggage system was affected by a number of issues. First, there were technical software problems, but more significantly BA's challenge was integrating teams of staff, and it has been addressing this as a priority.
	Since 27 March, the baggage system became clogged as more bags were checked in than were being placed on aircraft. On a number of occasions, the system has stopped functioning, which has led to planes taking off without some or all of their luggage. BA has had to cancel short haul flights to ease the pressure on the baggage system. By the end of the weekend, some 28,000 bags had been placed in temporary storage. BA drafted in 400 volunteers over the weekend to help sort those bags and estimates that it will take up to a week to get them back to their owners.
	The issue is mainly a problem for departing passengers. BA has advised that the incoming arrival bag times have been coming down steadily over the past few days and the average first bag time is now seven to eight minutes. That is as good, if not better, than for other Heathrow terminals.
	As the Secretary of State has made clear, we expect BA and BAA to work together to ensure that solutions are found and that there is as little disruption as possible to passengers. Department for Transport officials have been in touch with BA and BAA at a senior level throughout. The Secretary of State spoke to the chief executive of BA, Mr. Willie Walsh, and to Mr. Colin Matthews, chief executive of BAA, on Saturday, and I visited the airport on Sunday to see the situation at first hand.
	We have also been assisting BA, where appropriate given the necessity of maintaining effective security, in optimising all its security screening options, to help it tackle the backlog of bags that have yet to be reunited with their owners.
	As our discussion document "Towards a Sustainable Transport System", published last October, makes clear, we want a much greater emphasis on the needs of transport users. Passengers should expect airline and airport operators to deliver a good standard of service; so, although we recognise the considerable challenges in opening a major new terminal, we agree that it is extremely regrettable to say the least that passengers using T5 have had to suffer an unacceptably poor travel experience. Although I am convinced that T5 will ultimately prove to be a significant benefit to the passenger, there is no denying that delivery so far has fallen well short of expectations. What struck me on Sunday was just how devastated individual staff members were, from chief executives through to staff on the shop floor, that this had gone badly wrong. They were working hard to restore their own pride, as well as that of the operation, as was shown by, among other things, the number of volunteers who were helping.
	The important thing now is to put things right. BA's and BAA's focus must not be deflected from resolving the problems affecting T5 and ensuring that the passenger experience improves significantly as a matter of urgency. That includes ensuring that those passengers who have been affected by disruption receive, at the very least, the assistance and compensation to which they are legally entitled. It is in both BA's and BAA's interests to work effectively together to deliver the necessary improvement. The travelling public are not mainly interested in who is to blame for which particular failing, but rather in being treated properly when things go wrong and in seeing real progress towards the high standards of customer service to which both BA and BAA aspire. Once T5 is on track, we will press both operators to identify the lessons learned and to explain their plans for ensuring that good service standards are not only delivered but maintained.
	Before concluding, I must comment on security at T5. As one would expect, I am unable to go into detail on the specifics of issues raised in the last few days, but I would like to reassure the House that the Government enforce a sophisticated airport security regime, which delivers many layers of protection to the travelling public. The Department works closely with airport operators to ensure that standards are met, and officials have worked particularly intensively at Heathrow in recent weeks, given the opening of T5. That is normal in respect of security when a new terminal comes on line and helps to identify any areas that require improvement. The Department then works with the operator to ensure that swift action is taken to ensure that appropriate mitigation is in place. The process has been no different with T5. Let me assure you, and the House, Mr. Speaker, that aviation security is of the highest priority for the Government.
	In conclusion, we accept the reality of the problems facing passengers using T5, we are monitoring the situation very closely to encourage BA and BAA to address the issues and we stand ready to assist in any way if it is appropriate to do so.

Jim Fitzpatrick: The hon. Lady has asked a series of questions and I shall try to respond to as many as I can. First, I rebut the allegation of collusion. The consultation that the Department recently concluded in respect of the expansion of Heathrow was based on the 2003 White Paper that followed years of examination of whether we could meet the strict environmental standards that we laid down on noise, emissions and access. We were confident that those standards could be met and that is contained in the consultation documentation—the matter is out for consultation. Of course, the hon. Lady will have the opportunity to discuss the issues on Wednesday afternoon, when the Liberal Democrats have a half-day Opposition debate on Heathrow. I suspect that we will deal with the issues in more detail then.
	On the issue of fingerprint checks, they were not dropped as a matter of security, but there were questions about the system's efficacy and BAA decided not to proceed with it at that time. That was not a matter for the Department for Transport or for TRANSEC. On the question of scrutinising the plans, we had no reason to believe that the plans for T5 would not work. The building—I believe that we all monitored its progress over recent years—is an exemplary example of British engineering, architecture and construction. It is a magnificent structure. Officials of the Department for Transport, BAA and BA are always in regular contact and we had no reason to believe that it would not work. We were confident about that and we were sure that the terminal would operate effectively.
	This has been a great disappointment. As the hon. Lady said, national pride has been dented. Her Majesty opened T5 to national fanfare and delight in early March. The following week, when the A380 arrived for its first flight, many of us believed that Heathrow had turned a corner and that the bad publicity of recent years would turn into positive publicity, notwithstanding the importance of scrutiny as regards the expansion. Clearly, that was not the case.
	The hon. Lady asked about compensation. The European Union denied boarding and cancellation regulations set out an airline's responsibilities to passengers in the event of long delays on departure or the cancellation of flights. It is the responsibility of British Airways to comply with that regulation with regard to the delays and cancellations experienced at terminal 5 in the past few days. From our discussions with the airline, it is clear that it is aware of its responsibilities under those regulations, and is endeavouring to comply with them. The Civil Aviation Authority is monitoring the situation to ensure that that happens.
	The 2012 Olympics will be a matter of great national pride. We are very confident that we will be able to deliver the Olympics as outlined, on time, and we have no reason to believe that that will not be the case. Incidents such as what has happened at T5 serve only to reinforce our resolve to ensure that we redouble our efforts and that the 2012 Olympics are a huge success.
	I believe that ultimately, and within a short period, terminal 5 will be a source of great national pride. It is a magnificent building; the services within it are top of the range in terms of passenger experience, and we believe that BA and BAA will be able to show that off to the world in very short order.

Jim Fitzpatrick: In my past few answers I tried to rebut the allegation that BAA wrote our consultation document for us. That is patently not the case; it is a Department for Transport document and we stand by that. I hear what the hon. Gentleman says about the British Airways website. I am sure the company heard it too and is no doubt correcting the website at the moment. I shall not criticise BA for that being the last thing it is paying attention to, because the company is trying to make sure that the operation at T5 is corrected and improved to serve passengers. That is where the focus ought to be.
	I believe I answered the point about compensation; the CAA is monitoring the situation and British Airways is clearly aware of its responsibilities under the EU denied boarding and cancellation regulations and is endeavouring to comply with them. Obviously, members of the public will be able to check on various websites for advice as how best to proceed.
	On the hon. Gentleman's advice that people choose rail rather than air, we see rail as a major success story for the country. The Government are investing £88 million a week in rail travel, as we know. The public make their own decisions, and as rail operation has improved respective percentages for Manchester to London travel via rail or air have been reversed. However, that does not obviate the need for air travel to different parts of the world, or indeed different parts of the country, if necessity arises.
	We are disappointed about what is happening at the moment, but we are confident that ultimately terminal 5 will be a massive addition to Heathrow and a matter of national pride. We all acknowledge that it is not there yet, but people are working hard to try to make sure that it is as quickly as possible.

Jim Fitzpatrick: My hon. Friend, who as we all know chairs the Select Committee on Transport and is held in high regard throughout the whole House, identifies that damage to Heathrow is damage to UK plc. That is the very reason why we support expansion at Heathrow; running at 98.5 to 99 per cent. capacity it does not serve the UK as well as it should. Without expansion the UK will continue to suffer and that will affect our economic ability to compete on the world stage.
	My hon. Friend raises absolutely appropriate points in respect of analysis and a post-mortem into what went wrong. As I said in my original remarks, the priority at present is for BA and BAA to continue to work hard to correct what has gone wrong, but we shall want to see the lessons, to know why things went wrong in the first place so that we can be assured for the future. I know that my hon. Friend and her Committee will take a keen interest in these matters, and we will share as much information as possible with her as it arrives.

John Randall: The Minister did not answer the questions asked by my hon. Friend the Member for Chipping Barnet (Mrs. Villiers) about security which, of course, is a Government responsibility. Will he confirm that his officials were able to bypass security at terminal 5 on a number of occasions? What weaknesses did they discover, what has been done about it, and were they tested again?

Jim Fitzpatrick: I apologise to the hon. Lady for not responding to that specific point. I tried to note down her questions, and I accept that I missed that one.
	There have been reports of weaknesses in the security system, which were identified beforehand. I can assure the House, notwithstanding the fact that I am not likely to go into the detail of security arrangements at the Dispatch Box, that TRANSEC and the Department would not have given the green light to T5 to open if we were not satisfied that the security arrangements in place on 27 March were adequate to protect members of the public. We are proud of the security and protection that we afford the travelling public, and those issues that were identified as requiring attention were either addressed or being addressed, but they were not a reason not to proceed with the opening.

Jim Fitzpatrick: The hon. Gentleman outlines the fact that the situation is unacceptable both generally and to his constituents in particular, and I fully accord with him that that is the case. I have said repeatedly in the past 27 minutes that we are doing everything we can to assist and ensure that the situation is rectified. I would quibble with him, however, over one small point. Notwithstanding the efforts and endeavours of front-line staff, to whom I paid tribute, both when I replied to my hon. Friend the Member for Hayes and Harlington (John McDonnell) and in my opening remarks, senior managers are working hard. When I was at Heathrow, I met Colin Matthews, Gareth Kirkwood and Mark Bullock, who had been working extended hours with ordinary staff members. They are responsible—they are the management—and were expected to be there, but they were working shoulder to shoulder with their colleagues, including volunteers, doing everything they could to put the situation right. I have no reason to doubt that that stretches through all levels and ranks in the organisations.

Stewart Hosie: Fortunately, I fly to Dundee from London City airport, and I am truly grateful for that. However, I understand that one in six of all air journeys from Scotland—more than 3 million passenger journeys a year—go to Heathrow. It is a vital business gateway. I am sure that the Minister has the quotes from what the business community said immediately when the chaos happened. The Federation of Small Businesses Scotland said:
	"It is an open secret that flights to and from Scotland are the first to be scrapped in order to clear the backlog".
	The Scottish Chambers of Commerce added:
	"It seems once again that services to and from Scotland are suffering disproportionately."
	These things happen from time to time, so will the Minister make representations to BA and BAA that, should events such as these occur again, essential business services to Scotland from whatever airport will not be disproportionately affected in favour of other flights?

Jim Fitzpatrick: I thought that Her Majesty performed a magnificent opening of T5 on 14 March. The terminal's going live last week was obviously a completely different occasion. I have tried to answer the points raised by the hon. Lady in respect of the information, data, evidence and science that we have published in the consultation documents. It is our information, and we stand by those publications. This is not a matter of being gullible but of trying to protect UK plc.

Philip Hollobone: Is not what we have here, as with Network Rail and the disastrous overrunning of the new year engineering works, the inability of managers at middle and senior management levels to manage projects effectively? Given that the Government will not have a second chance with the Olympics, can we have a major Government inquiry into why project management skills for some of our flagship projects have proved so woefully inadequate?

Gerald Howarth: On a point of order, Mr. Speaker. I am conscious, as is the whole House, that you are extremely vigilant in seeking to protect the interests of the House to ensure that important announcements made by Ministers are made first of all to the House rather than to the media. This morning, the Ministry of Defence announced by way of a written ministerial statement that it has signed a contract with a consortium called AirTanker for the future strategic tanker aircraft. That contract was foreshadowed in 1997 as the largest private finance initiative the Ministry of Defence has produced, worth something like £13,000 million.
	The MOD announced in February 2005 that it had selected AirTanker as the preferred bidder, yet it was only today that it issued a written ministerial statement. In fact, there was a press conference to tell the press all about the matter at 2 o'clock last Thursday. I wonder whether you could advise me on what I might do, Mr. Speaker. I learned that there was to be such a press conference at 1 o'clock when I was attending a conference organised by the Society of British Aerospace Companies. I asked my office to check with the Ministry of Defence, and the noble Baroness Taylor sent me a letter, in which she said:
	"Due to the rapid pace of the final stages in closing this complex commercial and financial deal, it has not been possible to follow the normal parliamentary protocols in making this announcement."
	However, the fact is that not only has this process been in gestation for 10 years, but the company concerned, Thales, produced a draft press release last Wednesday, in which there was a reference to the Secretary of State for Defence—

'Schedule (Possession orders relating to certain tenancies) (which makes provision about possession orders and their effect on secure tenancies, assured tenancies, introductory tenancies and demoted tenancies including provision about the status of existing occupiers) has effect.'.— [Mr. Wright.]
	 Brought up, and read the First time.

Mr. Speaker: With this it will be convenient to discuss the following:
	Government new clause 12— Shared ownership leases: protection for certain leases.
	Government new clause 13— Service charges: provision of information and designated accounts.
	New clause 1— Consultation principles—
	'(1) The Secretary of State shall, by regulations made by statutory instrument, set out a code of practice to govern local authority consultations with tenants concerning—
	(a) a change of landlord, or
	(b) a major change in the management of their homes.
	(2) Regulations made under subsection (1) shall require the local authority to—
	(a) place in the public domain all relevant information as is necessary for them to influence or control the management of their accommodation and environment including the resources available to the authority to spend on its stock, stock conditions surveys, the business plan of the proposed landlord, the transfer valuation, details of any land and property to be disposed of, and any other information on which the Offer Document and transfer proposal is based,
	(b) ensure at the start of the consultation that all tenants are aware of their rights to access information as set out under paragraph (a),
	(c) ensure that material it produces is objective, balanced, informative and accurate,
	(d) provide the same level of resources for any tenant group who serves written notice on the authority opposing a proposal as that given to any tenant group making such a proposal so that they can put an alternative view to tenants,
	(e) not deny any reasonable request from any group under paragraph (d) for lists of addresses and access to notice boards, meeting facilities and other relevant resources to enable all parties to communicate with those entitled to vote,
	(f) give two months notice of—
	(i) the start and end date of the ballot, and
	(ii) how those eligible will be able to vote, and
	(g) ensure that information regarding who has voted at any point in time is treated in confidence,
	(h) not exceed spending limits for these consultations as may be determined by the Secretary of State and certified as proper by the District Auditor.'.
	New clause 8— Subsidy arrangements: formula and exclusions—
	'(1) In section 80 of the Local Government and Housing Act 1989 (c. 42) (calculation of Housing Revenue Account subsidy) after subsection (3) insert—
	"(3A) In determining a formula for the purposes of this section for any year, the Secretary of State shall take into account—
	(a) the resources required properly to manage, maintain and repair houses and other properties within their respective Housing Revenue Accounts,
	(b) research into these matters, and
	(c) the resources required to enable respective authorities to acquire, rehabilitate and build new housing to be held within their Housing Revenue Accounts that contributes to meeting the need for affordable housing within their respective areas.'.
	New clause 9— Orders for possession—
	'Section 7 (orders for possession) of the Housing Act 1988 (c. 50) is amended as follows—
	(1) In subsection (3), at the beginning of the subsection, add "Subject to subsection (3A)".
	(2) After subsection (3), add the following subsection—
	of the Housing and Regeneration Act 2008.".
	(3) In subsection (3), for "subsections (5A) and (6)" substitute "subsections (5A), (6) and (6A)".
	(4) In subsection (4), for "subsections (5A) and (6)" substitute "subsections (5A), (6) and (6A)".
	(5) After subsection (6), insert—
	"(6A) If the court is satisfied—
	(a) that Ground 8 in Part 1 of Schedule 2 to this Act is established; and
	(b) that some rent is in arrears as a consequence of a delay or failure in the payment of relevant housing benefit, it shall not make an order for possession unless it considers it reasonable to do so.".
	(6) At end insert—
	"(8) In subsection (6A) above—
	(a) "relevant housing benefit" means—
	(i) any rent allowance or rent rebate to which the tenant was entitled in respect of the rent under the Housing Benefit Regulations 2006 (S.I. 2006/213); or
	(ii) any payment on account of any such entitlement awarded under Regulation 93 of those Regulations;
	(b) references to delay or failure in the payment of relevant housing benefit do not include such delay or failure so far as referable to any wilful act or omission of the tenant."'.
	New clause 29— Sinking funds—
	'(1) The Secretary of State must, within 12 months of the date on which this Act is passed, make regulations regarding the terms of leases granted by local authorities for residential properties.
	(2) The regulations made under subsection (1) shall provide that all leases granted by local authorities for residential properties shall be deemed to include provision for tenants to make contributions to a sinking fund to be used to finance any proposed works in relation to tenants' properties.
	(3) Regulations made by the Secretary of State under this section shall be made by statutory instrument.
	(4) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.'.
	New clause 31— Involvement of tenants in decisions on works—
	'(1) The Landlord and Tenant Act 1985 (c. 70) is amended as follows.
	(2) In section 20ZA (consultation requirements: supplementary), for subsection (5) substitute—
	"(5) Regulations under subsection (4) shall include provision—
	(a) requiring the landlord to give reasons in prescribed circumstances for carrying out works;
	(b) requiring the landlord to provide details of proposed works, including estimates of costs, to tenants or the recognised tenants' association representing them;
	(c) requiring the landlord to invite residential tenants or the recognised tenants' association to propose the names of persons from whom the landlord should try to obtain other estimates;
	(d) requiring the landlord to consult those tenants affected by the proposed works on—
	(i) the specifications for any tenders issued in respect of the proposed works, and
	(ii) all tenders received in respect of the proposed works;
	(e) to enable tenants or the recognised tenants' association to submit, within a specified period of time, a counter proposal in respect of proposed works, specifying alternative provision of the proposed works;
	(f) requiring the landlord to—
	(i) have regard to any observations made by tenants or the recognised tenants' association in relation to the proposed works,
	(ii) hold a ballot of the tenants directly affected by the proposed works on any counter-proposal that is supported by 25 per cent. or more of those tenants directly affected by the proposed works, and
	(iii) adopt the counter-proposal if it is supported by a majority of tenants directly affected by the proposed works in the ballot;
	(g) requiring the landlord to make available for inspection by the public at reasonable times and for a period of 10 years from initial publication—
	(i) details of any proposed works and any responses to consultations on such works,
	(ii) any counter-proposals that are supported by more than 25 per cent. of tenants directly affected by the proposed works, and
	(iii) any requests to a residential property tribunal service for adjudication and details of the consequent decisions;
	(h) in cases of dispute, for a leasehold valuation tribunal or other independent arbitration tribunal to make a determination in respect of proposed works or agreements upon application by a landlord, residential tenant or the recognised tenants association.".
	(3) In section 19 (limitation of service charges: reasonableness), after subsection (3) insert—
	"(3A) If the relevant contribution of any residential tenant in any 12 months period exceeds £12,000, arrangements must be made by the landlord for such tenants to pay that contribution in monthly instalments not exceeding £250 for that period.".'.
	Amendment No. 5, page 113, line 14, in clause 280, leave out from 'ballot' to 'or' in line 15 and insert
	'in accordance with the code of practice set out in section (Consultation principles);'.
	Amendment No. 145, page 114, line 7, in clause 281, at end add—
	'(4) Section 105 of the Housing Act 1985 (consultation on matters of housing management) is amended as follows.
	(5) In subsection (2), after paragraph (b) insert—
	"(ba) a proposed measure or policy relating to the matters specified in paragraphs (a) and (b) about which the Secretary of State has published a consultation document to which the landlord authority intends to make a written response."'.
	Government amendments Nos. 31 to 41.
	Amendment No. 14, page 122, line 38, in clause 290, after 'the', insert 'earlier of—
	(a) the'.
	Government amendment No. 42.
	Amendment No. 15, page 122, line 38, in clause 290, at end insert '; or
	(b) the completion of the sale'.
	Government amendments Nos. 43 to 50.
	Government new schedule 2— 'Possession orders relating to certain tenancies.
	Government new schedule 3— 'Service charges: provision of information and designated accounts.
	Government amendments Nos. 51 to 59.

Michael Meacher: I have a great deal of sympathy with what the right hon. Member for North-West Hampshire (Sir George Young) said about new clause 9, but I want to speak specifically to new clause 8, which is not entirely unrelated and which goes to the heart of the Government's policy on council housing.
	There are three drivers behind new clause 8. First, the demand for social and affordable housing in the country at present far exceeds what could be accommodated by the Government's present plans for the sector. Secondly, it is unrealistic to rely on the private sector to provide decent, secure homes that people on lower incomes need at prices that they can afford; nor, unfortunately, is there evidence—quite the contrary—that housing associations are rising to the challenge to fill the gap. Thirdly, the funding for local authorities to maintain and repair their existing stock, let alone to build the new homes that are so desperately needed, is grossly inadequate.
	On the first point, the Government say that they propose to increase the number of houses built per year from 200,000 to 240,000, to reach a total, which we have heard so many times, of 3 million by 2020. But the current baseline, of course, is not 200,000; it is actually about 170,000. That figure is likely to fall, sadly, for a number of years ahead, because of the sub-prime market disaster gradually deepening and the credit crunch. The number of specifically social and affordable houses needed is estimated by Shelter to be over 50 per cent. higher than under the Government's current spending plans and more than 100 per cent. by Alan Holmans, who is a very respected housing economist, if the backlog of housing need is to be met within a reasonable period, which I am sure that all Members on both sides of the House would wish.
	On the second point, there is no way that the private sector in the current economic climate will be remotely able to fill the gap; nor, indeed, is it very wise for it to try to do so anyway. According to a parliamentary answer that I received in November, more than 200,000 households have already taken out mortgages with a house price to income ratio in excess of six to one, including 38,000 with a ratio in excess of 10 to one. That is clearly unsustainable. We are already in great danger of generating our own sub-prime market disaster, too—not just in the US—and we certainly do not want to make things any worse.
	The passion for private ownership, which I find very difficult to understand but with which the Government seem to be obsessed just as much as the previous Tory Government were, is absolutely fine for people who can afford it—probably all hon. Members own their own house—but it is not shared by the majority of people on low incomes at the bottom end of the scale. Probably a fifth of the population, or something of that order, have such low incomes and such uncertain employment prospects that they will never be able, under present circumstances, to afford to buy and maintain a home. For them, what is clearly needed is good quality, secure public housing at rents that they can genuinely afford. That is the issue at the heart of the Bill. Indeed, that is the message that, given current housing demand, people are crying out for the Government to hear.
	In 2006, 1.6 million households were on council waiting lists. I have not seen later figures, but I suspect that today the number is nearer 2 million. Indeed, 12,000 are currently on the council waiting lists in my Oldham constituency, yet the total council housing stock in Oldham is today only about 12,500, down from 27,000 some 20 years ago. In addition, across the country almost 100,000 households are homeless and in temporary accommodation, according to a technical view of homelessness.
	Let me turn to a key issue by relating a remarkable fact. There can be no clearer indication that the demand for council housing is both very strong and growing despite the pressure-cooker conditions that now prevail in terms of public rented housing, than that 2.5 million existing council tenants have opted to remain with their council even though the Government have denied them the fundamental basic right of the fourth option. Regretfully, I must say that I think that denial is morally and politically indefensible.

Simon Hughes: I, too, shall be brief, although these are large matters that affect huge numbers of people. I believe that I am still the Member of Parliament who represents the largest number of council tenants—about 40,000—who live in some two thirds of all the homes in my constituency. A further 10,000 people in my constituency have bought under the right to buy and are leaseholders of the council, so they, too, have a council interest. I wish to discuss the amendments and new clauses relating to those two groups.
	I wholeheartedly endorse new clause 1 and new clause 8, which has just been discussed by the right hon. Member for Oldham, West and Royton (Mr. Meacher). The regime affecting councils and their council housing stock continues to be nonsensically unfair and unreasonable. It is not justifiable not to have a level playing field whereby the money put in can be put back into the housing stock for which it is raised. Where the tested democratic wishes of the tenants, plus their elected representatives, want council housing to continue, the Government cannot have it both ways—they cannot say that they believe in the devolution of decision making and then force other outcomes and fiddle the financing to make things much more difficult, as the right hon. Gentleman made clear.
	Southwark council has resisted all attempts to force stock transfer and will go on resisting them even if it has to raise its own capital to do so. If the Government ever insisted on forcing us or trying to force us, we would go to court to challenge them. I am advised by colleagues that that would be the approach. The Liberal Democrats are the majority party in the joint administration, but that is the view of all four parties with elected representatives on the council—the Liberal Democrats, the Labour party, the Conservative party and the Green party.
	Secondly, I am surprised that the Under-Secretary of State for Communities and Local Government, the hon. Member for Hartlepool (Mr. Wright), who understands council housing matters from events in his own constituency and the history of the north-east, has not managed to persuade the Government that their policy in this area has been flawed and that we need a regime, such as that proposed in new clause 1, tabled by the hon. Member for Great Grimsby (Mr. Mitchell), which would ensure that the decision-making processes are fair, transparent and not rigged against the interests of tenants. I shall leave others to make that case. Many colleagues are, in general terms, part of a movement called "Defend Council Housing", and they believe that council housing was, is and will continue to be a good thing.
	The first council housing in England was in my constituency, too. It was built by a very eminent MP, Dr. Salter, who was originally a Liberal and then a member of the independent Labour party, and his colleagues in Wilson grove in Bermondsey. It is still there. People want to live in it. It is decent housing, built in the 1920s. Many other places followed that tradition—it is a 20th-century version of the social housing tradition set by some housing associations, of which we are very proud.
	The Government seem to believe that the only happy council tenants live in council estates where every other resident is not a council tenant. That has never been my experience. People are happy to live next to other council tenants. If the management is good, they do not insist that the person next door is an owner-occupier or the tenant of a social landlord or housing association. They are happy that the other people are council tenants as long as the management is good. If management is good, council tenancies are often more popular. People would often rather be a council tenant than a tenant of a housing association, because councils are often much more accountable to their tenants. At least with councils, tenants can kick out the management every four years.
	I am about to have a meeting with the Guinness Trust. For years, the tenants of Guinness Trust properties in my constituency—one near London Bridge and Guy's hospital at Snowfields, one off the Old Kent road at Pages walk, and one in Kennington—have felt that the service has been lousy and unresponsive. The chief executive comes to meetings. He is a nice man and he makes lots of promises, but he does not deliver on them. The same applies to the Peabody Trust, which is also based in my constituency. It is a good organisation, but often has not delivered. Housing associations, particularly the bigger ones, often fail. That is why council housing is a good thing. I would hope that a Labour Government would share that view.
	I want to speak briefly about new clauses 29 and 31 and amendment No. 145, which are tabled in my name. The Minister and his advisers will notice that they are familiar. That is because they feature in my Leasehold Reform Bill, which was number 14 in the ballot for private Members' Bills and got off the runway a few weeks ago, when I was able to start Second Reading. If the Minister is not willing to buy these provisions—if I cannot incorporate them into this Bill—I hope that by the end of the next few weeks he will agree to either this wording or some other wording so that my Bill can become law as a complement to this Bill.
	New clause 29 is simple. It would allow local authorities to set up sinking funds. Councils used to have sinking funds, but they were abolished following a court case. Effectively, we will never again have a communal sinking fund, for all sorts of reasons with which I need not trouble the House. Such a fund is a bit like a piggy bank. People often prefer to put in money up front against the rainy day when they will have to pay money for capital works. The new clause would allow councils to set up sinking funds that were specific to a property. That would mean that the leaseholder could put some money aside so that there was some money in the kitty five years later, when the roof had to be done or the lifts had to be replaced. The provision would be discretionary—the leaseholder would not have to put money into the sinking fund—but it would clarify the uncertainty of the legal provision. Such a provision would be widely welcomed—I have consulted widely on that.
	More important is new clause 31, which would fundamentally change for the better the way in which leaseholders are consulted about works on their estates. Most leaseholders in North Southwark and Bermondsey are on estates. The Government tell the council that it has to comply with the decent home standard by 2010, and the council says, "Yes, Government. We are happy to do that." The date might slip a bit to 2011 due to the debate about the money. However, the implication is that although the tenant gets the work done at no significant extra cost as it is paid for by the housing revenue account, the leaseholder is billed for the work. They are not against it, but the bill can be very expensive. You may know, Mr. Deputy Speaker, although I do not know what the situation is in your constituency, that the bill for capital works can be as high as £27,000. That can come out of the blue to a pensioner couple with no reserves. The new clause would ensure that the residents and the leaseholders were involved at all stages of the process.
	Proposed subsection (2), for example, would require consultation by the landlord, the council, with the leaseholders—they are confusingly called "tenants" in the Bill and the Landlord and Tenant Act 1985, which the new clause would amend—on specifications for any tenders. It would also allow tenants, or a tenants and residents association, to have a counter-proposal considered by the local authority if they were to get support from 25 per cent. of their total number. The council might say, "We are going to replace all the windows and doors in your tower block." If there were support for a counter-proposal that actually the windows did not need to be replaced, just the doors, it would have to be put as an alternative in a ballot. If the counter-proposal were supported by 25 per cent. of the tenants or more, such a ballot would be agreed to.
	The new clause would require the documents on such matters to be kept and available for at least 10 years. One problem that has occurred, including on the Brandon estate in Walworth, on the Southwark-Lambeth border, has been whether proposals for new windows are acceptable and compatible with the style of the property concerned. That issue can be contentious, and it returns later when an idea is suddenly resurrected. People quite rightly say, "We want to see the paperwork"—the justification of why the windows need to be replaced. Often, the documents are not available for as long as 10 years. In the life of a leaseholder, 10 years may be quite a short time to be in a property, so the new clause would set a 10-year minimum requirement for keeping the documents.
	Finally, the new clause suggests that local authorities should be able to set up independent local arbitration tribunals. The leasehold valuation tribunal, which is a national body, is a good thing, but somebody has to pay to have a case there. By definition, as it is national, it is not local. There are some good arbitration bodies—we have a very good mediation service in Southwark—but not every local authority has one. The new clause would allow a local arbitration procedure, so that if there were a dispute between the council and the leaseholders, both sides could agree to the case being resolved locally, at little or no cost. Tribunals would obviously have to be independent, not run by the council.
	With regard to amendment No. 145, sometimes, understandably, councils have to do things because the Government tell them to. That is okay, if that is what Parliament agrees and gives the Government the power to do. Decent homes policy is one such example. The Labour Government decided that there should be a policy of upgrading all social housing to minimum standards by 2010-11, and I supported them. That might slip slightly, but the principle is good. When that was agreed and imposed, however, there was no consultation with leaseholders about its impact. It is very important that, if the Government initiate a policy, there is consultation with leaseholders about its impact on them, not just on tenants.
	Tenants and leaseholders would be much better served if the new clauses on their issues were agreed to. You saved the Minister earlier, Mr. Deputy Speaker, from owning up to the fact that the Government have not yet accepted any amendments or new clauses. He has an opportunity to redeem himself, gain credibility and gain love and support from tenants and leaseholders. He can improve the prospects of the Labour party in the elections on 1 May in London and elsewhere. In the end, he can do what is right for tenants and leaseholders by accepting the new clauses. I hope that he will be brave enough to make his name by doing that. If not, I promise him that my Bill will come back in June, and will be back again and again until, eventually, he will have to give in.

John Hemming: I share the hon. Gentleman's concern about the ludicrous way in which one-sided arguments are made in large-scale voluntary transfers. In new clause 1(2)(h), he proposes a limit on the amount of money that is spent. In Birmingham, which, admittedly, is the largest public sector landlord, a sum of £12 million was spent about five years ago to try to bamboozle tenants into a stock transfer. Would that be covered by his provision? What is a reasonable limit?

Lynne Jones: My hon. Friend makes an important point about the amount of money that has been stolen out of council housing. Is it not about time that we scotched the myth that council tenants are subsidised and feather-bedded? Far from it, resources have been taken out of council housing, which should have been invested for the benefit of council tenants and also for the thousands of people on the waiting list.

Austin Mitchell: My hon. Friend is right. Money is being taken out of the pocket of council tenants and out of the housing revenue accounts that should be used for the improvement of their housing. Indeed, it has not only been taken in the form of the £1.5 billion —soon to be £1.6 billion—that is taken out of housing revenue accounts to be recirculated through subsidy or to pay off historic debt, but my hon. Friend the Minister admitted in a parliamentary answer last December that, on top of all those extractions, the national housing revenue account will go into surplus in the coming year. Effectively, that is another tax of £180 million from housing revenue accounts taken out because, with the increase in rents, the fund has moved into surplus. That surplus will go on growing, and it will reach £1 billion by 2022 if nothing is done about it.
	Huge sums are being taken from council tenants, who are being unfairly treated. Interesting light has been shed on that and on the financing of council housing by the study of six authorities opting out of the housing revenue accounts. The study, which is the reason for the new clause, was conducted by the Department and published only last week. The review concludes that
	"the business plans for all authorities indicate they need a level of investment over 30 years which is higher than the spending needs assumed in the HRA subsidy . . . In other words, their plans for basic sustainability would not be deliverable within the HRA subsidy system if current policies are maintained."
	Steve Partridge, the Housing Quality Network consultant who was advising the inquiry, tells us that
	"the major repairs allowance across the country"
	is
	"40 per cent. short of what most people would estimate is a minimum investment need over 30 years".
	He also said that the report identifies the fact that current allowances undercut
	"basic investment needs by 43 per cent. over 30 years".
	The Government and the Bill cannot go on in this fashion. They must do something to help and support councils that are struggling to maintain their stocks and to achieve a decent homes target, but are being penalised by the Government in this way. That is not good enough. The new clause offers a chance to do something about it, which the Government should take because they need sustainable council house funding. It is no use saying, "We will review these matters next year when the report comes in." There is pressure on councils now.
	Perhaps a couple of hundred councils will be forced to conduct large-scale voluntary transfers, or to attempt to do so, and will put the proposal before the elections, possibly for a second time, or in some cases a third, unless they get help from the Bill now. It is no use saying, "Next year we will look at the whole thing again and give councils a fairer deal." The need exists now and the Government must do something. That is the purpose of our amendments.

Robert Syms: In introducing the debate and the programme motion, the Minister talked about the Public Bill Committee. The debate on Report is an opportunity for all Back Benchers—not only those, such as me, who had the privilege of serving on the Committee—to contribute to the Bill. I suspect that today's debate will be dominated by new clauses 1 and 8, to which the hon. Member for Great Grimsby (Mr. Mitchell) spoke. I support a lot of what he and the right hon. Member for Oldham, West and Royton (Mr. Meacher) said.
	However we look at it, council housing will be an important part of our housing stock for many years; it is clear that stock transfer is not going ahead at the rate that the Government would like. There will be authorities that maintain their council housing, and if we are to meet the decent homes standard by 2010 and to have decent housing generally, we must take a view about the many millions of people who live in council housing in our country.
	New clause 1 is a useful opportunity that allows us to argue a little about the principles on which housing policy should be based. It would be useful if, at the end of the debate, the Minister made a policy statement on where the Government stand on council housing, because we are not entirely sure of where that is. If there is an issue that the House has not debated enough, it is council housing. I remember one or two Westminster Hall debates on the subject, but it has not been broadly debated. I hope that the Minister will take the opportunity to set out where the Government stand.
	I particularly want to talk a little about new clause 8. I became aware of the housing revenue account subsidy system only recently, when I realised that 20 per cent. of all the rents paid by tenants in Poole were taken by the Government to use elsewhere. Taking money out of housing revenue accounts—in Poole, there is an arm's-length management organisation—essentially means taking money from tenants in one area to subsidise tenants in another. As we have heard in this debate, well in excess of £100 million is taken from some council tenants to subside others.
	I have always believed that need has to be the basis of housing policy. However, if it is to be that, it should be met by national taxation, not by using tenants in one area, who may be less well off, to subsidise tenants elsewhere. The figures have been mentioned today: well over £180 million comes from tenants' rents, and in the vast majority of districts and boroughs people make some contribution, predominantly to the larger cities and inner London. Nevertheless, the transfer of funds and money is very substantial.
	Nobody quite understands how the formula is worked out and I welcome the fact that the Government are having a review. However, I suspect that the review will be only modest and I know that some authorities that want to opt out of the subsidy system have been negotiating with the Department, which, as I understand it, wants them to buy themselves out of that system. At the end of the day, if the authorities have to buy themselves out of the system, it may not be worth their leaving it.
	I have another point to make about the benefits of council housing versus stock transfer and everything else. If there is a subsidy system in which a local area is losing millions in rents, there is an added incentive for stock transfer, even if the tenants are not pleased with that option because they feel that they are being penalised if they remain council tenants. The contributing authorities include not only relatively leafy Poole and the Surrey boroughs and districts, but authorities such as Bolsover, Chesterfield—I see the hon. Member for Chesterfield (Paul Holmes) sitting in his place—Portsmouth and City of Durham. Many of the former mining areas have quite a lot of public sector stock. Money is coming out of the rents paid by tenants and being redistributed to the Camdens and other areas.
	We should be more transparent about what we are doing. If housing need is the basis of policy, it should be paid for out of general taxation, not by taking money from one set of tenants to subsidise another. In my own borough of Poole, we have very high house prices. That means that social housing takes more of the strain in relation to young couples. If Poole Housing Partnership was allowed the £3 million a year that is taken into new council housing or housing for the elderly, it could manage the housing stock for people generally. There is local demand that could be met if that money remained local.
	There must be a fundamental reform of the housing revenue subsidy system, which is not fair; I look forward to Government proposals on that. Liberal Democrat Members make an important point: unless there is reform soon, the consequences for many authorities, boroughs and districts that wish to retain council housing will become very severe.
	We need a statement from the Minister about council housing. As we have heard, 2.8 million people are still council tenants. Some very good housing authorities, run by local authorities of all political persuasions, provide good local housing. The hon. Member for Great Grimsby is right that some people would prefer to have their housing provided by a local authority than to opt out and be transferred into some new organisation that was subject, as we all know, to salaries going up, and that may not be as responsive to the demands of local people as the local council providing council housing and the local councillors whom people elect to protect their interests.
	It is a pity that the issue we are discussing was raised by a Back-Bench Member rather than a Minister. Nevertheless, the debate is a useful and timely opportunity to raise these important matters.

Mike Hancock: The hon. Member for Hayes and Harlington (John McDonnell) is not alone in his experience in his surgeries of the despair of those who face repossession. He is not alone in facing the damning lists of people who are desperate for housing, but he is right to tackle the matter in the way in which he has done.
	In my 37 years in local government, I have always believed that council housing was a good thing for any local authority. I am proud to have been brought up in a council house and I was always proud of the relationship between the tenant, the local authority and the Government. That triangle of strength, whereby all three sides worked together, was good for people. It provided decent homes in areas where they were needed. Mistakes were made—we have all seen the consequences—but the overwhelming majority of people who lived in council houses in the 1950s, 1960s, 1970s and 1980s believed that they were in a decent home and that they could rely on their landlord to take on their responsibilities.
	That position changed dramatically, first, under the Heath Administration with the Housing Finance Act 1972, which changed local authorities' responsibility. In the early 1980s, Prime Minister Thatcher fundamentally disposed of councils' right to build houses and made it increasingly difficult. She believed that she could change the system of providing social housing in this country. Hon. Members who have already spoken clearly identified that that experiment in trying to shift matters, which worked for a while, is failing now.
	The hon. Member for Hayes and Harlington eloquently exposed the decline in housing associations' ability to provide new housing. They do not want to take the risks involved—in many instances, they cannot afford it. They know that, if they build, few people will be able to afford the rents that they must charge for the development.

Mike Hancock: I welcome that intervention. I had not reached Tony Blair's part and his appalling treatment of local authorities, especially his total disregard of the role of council houses in providing answers to the housing crisis. Time and again, he mentioned the social consequences of crime and lack of education, but he never once faced up to the housing that his Government denied people. It is shameful for the Labour party, to which I once belonged. If I had not left it in 1980, I would have damn well done so in 1997, when Blair gave no commitment to councils' right to provide the sort of homes that they should have provided.
	New clause 1 is essential. If the Under-Secretary is serious—I accept the good faith that hon. Members have attributed to him—about rebuilding that partnership, new clause 1 is the foundation stone of making tenants believe that we now have a Government who will address their problems as applicants for housing, whether they are homeless; or elderly people who want to move into a different style of accommodation and are under-occupying their properties, but will not move because there is currently no viable offer; or those who desperately want to be rehoused because they are in overcrowded conditions; or the hundreds of thousands throughout the country who are being told by local authorities, not only mine, that they have no chance of being rehoused in a reasonable time.
	A reasonable time for some local authorities is 10 years, because the waiting lists are so long. My local authority has written to people on the housing waiting list and said, "We've got to be honest with you—you're now wasting your time believing that the local authority or housing association is going to solve your housing needs." What a disgrace that a Labour Government in office for 11 years are forcing local authorities to take those steps. New clause 1 is fundamental. If the Minister sticks to his word, and listens and addresses those issues properly, new clause 1 will be essential—to him, his Government and the future of the Labour party, if it is ever to rekindle any support on housing that it might have had from the people of this country.
	Let me turn to the point that the right hon. Member for North-West Hampshire (Sir George Young) correctly made about new clause 9. Not many other hon. Members have addressed this issue, but he was right: round 8 is essentially an unfair burden. Local authorities and housing associations have no choice but to implement that, while social landlords have no choice but to take the tenant to court to get either repossession or an order put on them. That imposes another financial burden, because once the proceedings start that tenant is responsible for the costs involved in the court case and so automatically faces another bill, of £200, on top of what they have already incurred. If we are talking about fairness, clause 9, which covers round 8, is essential if the people affected more and more by that situation are to be offered any hope.
	I am delighted that so many hon. Members have spoken in support of new clause 8, which is our only chance to address once and for all the daylight robbery in the housing subsidy. The council tenants in my city are effectively mugged by the Government year by year. If the relevant provisions are not repealed, close to £100 million will have gone to the Government from our city over the 10-year period from when those provisions first started to bite to 2012. We can imagine what could have been done with that in Portsmouth. Instead, we are having to put council rents up, to help fund the subsidy rip-off that we as a city face and pay the Government. Robbing the least able people—taking away money that could not only refurbish their properties sooner, but put in place the sort of housing that we desperately need—is notoriously bad politics.
	The hon. Member for Poole (Mr. Syms) was right when he talked about his borough, but the situation is the same in many other local authorities. I listened to the Secretary of State when she addressed the issue in her presentation on housing awhile ago. She said, "Of course the hon. Member makes a point, but it's all going to be solved in this review," but we have no idea what the review is going to cover and have been given no indication whatever of what consultation will take place with local authorities. My local authority contacted the Government and asked questions about how the formula is worked out, but was told, "It's very complicated." We know that it is complicated—that is why we had to ask. We were at least entitled to a sensible answer from the very people who are mugging citizens in Portsmouth, year by year, to take that money.
	My hon. Friend the Member for North Southwark and Bermondsey (Simon Hughes) was right to talk about the problems of leaseholders. Again, we need to be careful, but the amendments that he has tabled address those problems. I meet many leaseholders who want the local authority to buy back their properties, because they cannot afford the surprises that they face when, for example, a new roof is put on a block in which there are only two leaseholders. They are suddenly confronted with bills not for a few hundred pounds but for £15,000 or £17,000. The local authority says to them, "You can't spread the payment over a period." People who are in their late 60s or early 70s, or who are even older, face that sort of dilemma, and may then get a court order forcing them to pay the amount. What should they do? Who do they turn to? Surely not a Labour Government. Those people are in that mess because a Labour Government, who were aware of the problem, did not put in place a regime that would allow the issues to be dealt with properly.
	My hon. Friend the Member for North Southwark and Bermondsey talked about forewarning people of what is coming, and about making provision for a sinking fund, so that people can pay in advance, and know in advance exactly what they have to pay. Why do so many leaseholders find it so difficult just to get the details of the works that are being carried out? Why is the process not explained in a way that they can readily understand?
	If the Minister and the Government are really concerned about council tenants it is about time that they showed it. When we heard that there would be a return to council house building, I thought, "I'll believe it when I see it." The problem is that I do not have strong enough binoculars to see that far into the future. Many of the people whom I represent, who live in real despair of ever getting a decent place to live, look to the local authority, the housing association and the Government, not for payment of housing benefit or for dilapidated bed-and-breakfast accommodation, but for a decent answer to a fundamental question. They want somewhere decent to live. The Government have failed miserably, not just over the past 18 months but over the past 10 years. As I have said, the Tories are not blameless either.
	The Minister can look over the Dispatch Box for a smile from his Conservative opponents, as if to say, "That's the Liberal Democrats; they are again trying to blame everyone except themselves," but I am a member of the local authority in Portsmouth and I accept my share of the responsibility for not having been able to deal with the housing crisis there. However, we cannot deal with the crisis because our hands are tied and our legs are shackled, and we are, in the main, dealing with someone who does not want to listen, does not want to look at the problem, and is not saying much to lead me to believe that we will get the help that we deserve.

David Drew: I shall be brief because much, if not all, of what I want to say has been said. I am afraid that the Minister will find the tone of Labour Members' speeches monotonous, because many of us will rise to support Labour party policy. That policy has been reaffirmed countless times on the floor in conference, and was spoken of by my hon. Friend the Member for Great Grimsby (Mr. Mitchell). I am sorry that I was able to hear him speak; I was with my hon. Friend the Minister for Housing, talking about community land trusts, an issue that will come up later. I know that my hon. Friend the Member for Great Grimsby will have waxed lyrical—as did my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher) and my hon. Friend the Member for Hayes and Harlington (John McDonnell)—to make it clear how strongly we Back Benchers feel about the need to resolve the issue.

Lembit �pik: No. The carrot comes before the stick.
	New clause 11 stands, somewhat incongruously, at the centre of our present debate. As the Minister said earlier, and notwithstanding my complaints about the shortage of time, the Government have taken account of a number of points that were raised by Members on both sides in Committee. It is perhaps ironic that the Government new clauses and amendments in this group are, on the whole, uncontroversial and rather positive. I know that a number of housing organisations are encouraged by the fact that this Minister in particular has demonstrated a willingness to listen, which is to his credit. We are in the happy position of being able to praise him for the amendments that the Government have tabled so far. [Hon. Members: But?] Butthe rest of the picture may not be quite so rosy for the Minister.
	The need for amendments Nos. 14 and 15, tabled by me and by other Liberal Democrat Members, was brought to my attention by London Councils, an organisation of great standing that examines these matters in an objective and business-like way and seeks to add value to the Bill in that spirit. The amendments would do something very simple: they would protect both tenants and local authorities from having to pay any additional moneys after the completion of the sale of a right-to-buy property should it turn out that the valuation might not have been right at the outset.
	As aficionados will know, the Bill will put in statute the ability to correct an incorrect statutory determination of value and replace it with a correct determination, as long as that is done within 42 days. On the whole, London Councils and other organisations welcome that. The problem here is that there is no restriction preventing the revaluation from taking place after the completion of a right-to-buy sale. To put it simply, an individual can buy a property and then discover that it is subject to revaluation.
	As I am sure the Minister realises, that arrangement is potentially unfair, as people acting in good faith could be landed with an additional bill. I hope that, on reflection, he will either accept the amendments now or assure me that he will seek to introduce amendments containing exactly the same wordsor, if he feels that it is better to save the Government's face, almost the same wordsin another place. If he cannot give such an assurance, I may be inclined, in the light of what he does say, to seek separate votes on amendments Nos. 14 and 15.
	That is all that I really need to say about the amendments. They are self-explanatory, and I cannot see for the life of me why they should evoke a partisan response, or anything less than agreement from the Minister that, in principle, this is a sensible suggestion. It is in the interests of the general public and individuals who are involved in right-to-buy purchases in good faith. It does not compromise any intent of the Bill, or any value or policy statement made by the Government at any time in the past.
	Finally, let me deal with what are self-evidently the most controversial elements of the Bill. In a lucid and erudite speech, the hon. Member for Great Grimsby (Mr. Mitchell) laid the ground for consideration of the key subject in this part of the Bill. Explanations of new clauses 1 and 8 have already been given, and need not be repeated. However, I think it worth drawing attention to the passion with which Conservative, Liberal Democrat and Labour Members believe that these provisions are entirely consistent not just with the interests of housing policy, but with specific housing commitments made by this Labour Government during their time in office.
	The hon. Member for Great Grimsby has felt so strongly about certain subjects in the past that he has renamed himself Mr. Haddock in order to stick up for fishing; perhaps on this occasion, he may wish to change his name to Mr. Housing, as he seems no less passionate about this subject than he was about fishing in his earlier campaign. The rest of us fall behind him, as once again, this issue is shown to be a cross-party concern.
	My worry is that the Government, as the hon. Member for Poole (Mr. Syms) implied in his interesting contribution, are using economic drivers to push forward a dogmatic agenda that assumes that a particular outcome is so desirable that they will bribea word that others have usedlocal people and to some extent local authorities to achieve that result. Why? Why use macro-economic tools to cause micro-economic effects in local governments? In non-jargonistic terms, why are the Government so certain that driving housing out of the council sector is a good thing that they are willing financially to incentivise that policy to the point where many local authorities will shrug their shoulders and say, What are we supposed to do? They wonder what they can do to protect themselves when the Government are throwing hundreds of millions of pounds towards a specific policy outcome.
	I encourage the Minister to respond to the hon. Member for Hayes and Harlington (John McDonnell), who rightly said that the existing circumstances in which housing stock remains under local authority control directly fulfils Labour's policy objectives. Will the Minister therefore explain to him and to the hon. Members for Stroud (Mr. Drew) and for Poole, my hon. Friend the Member for Portsmouth, South (Mr. Hancock) and myselfnot to mention others who are yet to speakwhat exactly it is that the Minister can see that we cannot? What is it that compels the Government to use those colossal amounts of money to enact such a ground shift in how we manage housing policy in this country?
	Another worrying point, already raised by others, is the lack of investment in council house building. With the number of homeless estimated at 100,000it could be substantially higher as there is an awful lot of hidden homelessness in this countryit is quite obvious that we have a housing crisis. Another compounding factor is that, as far as I can see, the Government's policy, which is challenged by new clauses 1 and 8, is directly responsible for sapping investment from rehabilitating existing housing for council use in order to construct new housing.
	The hon. Member for Hayes and Harlington and others have pointed out that the average inflation rate for house prices is around 9 per cent., but in poorer areas, it is often a lot higher. A few years ago, house inflation in the less wealthy areas of my own constituency of Montgomeryshirein Wales admittedly, so it may not be directly affected by this legislationstood at 36 per cent. It compounds the offence of poverty when councils cannot ease housing demand because they do not have sufficient resources to tackle the problem.
	One of the great culprits has already been mentionedthe housing revenue subsidy system. I will not say much about that, but should my hon. Friend the Member for Chesterfield (Paul Holmes) catch your eye, Mr. Deputy Speaker, you would find that he is a true expert on the subject in a way that I am not.

Adam Price: I fully agree with the hon. Gentleman. I have seen the figures for England. I do not believe that a single council house was built in Wales last year. If Plaid Cymru is successful in regaining control of the authority in Caerphilly, we would be committed to having at least some council housing built next year. It would be great to have some positive competition from the Labour party on thatperhaps we could have a bidding war on the number of council homes we will build. That is the kind of political competition from which people would benefit.
	By accepting the new clauses, the Minister would signal that the regime under the new premiership is serious about its commitment to having a council house building programme that would matter and make a visible and significant impact

Adam Price: I agree with the hon. Gentleman. Clearly there are means of deepening tenant participation in all different models of tenure, but there is a model of accountability that people readily understandthe ballot box and local electionsand we should retain it.
	We are entering into a different phase in more general terms. After the Northern Rock fiasco, the ideological position that public sector equals bad and private sector equals good is completely tarnished. We are also entering into a new financial era. People in the United State of America are talking about 10 days that have changed capitalism, because the private sector is no longer awash with the kind of money to which the right hon. Member for Greenwich and Woolwich referred. There was a demand for bonds and asset-backed securities, and that is one of the reasons why stock transfer and the kind of financial instruments that it could create were attractive to investors at one point. We are now in an entirely different erathe credit crunchand we should not put our faith in the private sector when the money in it is drying up. We must examine other models that have served us well in the past. When facing such a housing crisis in this country we would be unwise not to grasp this political opportunity, given that there is such a consensus in this Chamber on the fact that council housing needs to be a far larger part of the solution than it has been for the past 10 or 15 years.

Stewart Jackson: I think we have already established that unity is not necessarily in evidence among members of the people's party, particularly in respect of the right hon. Member for Greenwich and Woolwich. His was a lonely voice as he ploughed the Blairite furrow.
	The Opposition are minded to support new clause 1, because we feel that a strong case has been made, for which I shall give some historical context. My party has been responsible for progressive social housing policies over the past 100 years. As Members know, in the 1950s the Macmillan Government delivered record amounts of house building. I can understand why the hon. Gentleman is upset and somewhat disillusioned with his Government when we look at the figuresthe killer facts. House building starts fell between 2006 and 2007. I have a lot of respect for the hon. Member for Portsmouth, South (Mr. Hancock). As a Portsmouth city councillor of long standing and an erstwhile Hampshire county councillor he knows his onions, but I have to tell him that the average social housing build was 47,000 a year under the Conservatives and only 17,300 under the unlamented former Member for Sedgefield.

Stewart Jackson: I do not doubt your universal powers, Mr. Deputy Speaker, but I probably agree with you on that point.
	I was just getting into my stride on the historical perspective. The reason why the housing revenue account had to be reviewed during the period of Conservative government was because of gross misuse of capital financing by irresponsible Labour councils. They all but bankrupted a large number of local authorities in London and outside. That is why the housing revenue account had to be looked at, although I realise it must be painful

Alistair Burt: May I make a bid to help matters along? Does my hon. Friend agree that no matter what the history may be there is an outbreak of genuine angst and concern on the Labour Benches about the situation facing housing after 11 years of Labour Government? Opposition Members are trying to put that right through the new clauses they propose. The history does not matter; what matters is today and the fact that the problems Labour Members are raising are not being addressed by their Government. My hon. Friend is speaking accurately to that.

Stewart Jackson: I thank my hon. Friend.
	We are prepared to support new clause 1, as we accept that there is consensus across the House. In developing a historical perspective on housing, I am merely making that case. Conservatives built council houses; Conservatives believe in council houses. Some of the most forward-looking Conservative authorities continue to support social housing. We take a practical and pragmatic view of social housing. We accept that dogmatism does not have a place in housing provision. People are intelligent, and they know what sort of houses they want to live in, and what sort of estates they want to live on, so there is no point in our being dogmatic. It is worth repeating the success of right to buy.
	We believe, too, in local autonomy, the empowerment of tenants and transparency, which is why we are minded to support new clause 1. We want a level playing field, and we want tenants to have all the necessary information. Hon. Members can make the point anecdotally, as the hon. Members for Chesterfield (Paul Holmes) and for Portsmouth, South and others have done, that in some local authorities, there has not been a level playing field and the jury has been nobbled. In all honesty, before my local authorityPeterborough city councilundertook a large-scale voluntary transfer, it won an 87 per cent. yes vote, and it was scrupulously fair before the ballot. My predecessor, who was a Labour Member, supported the ballot, and hon. Members will know that she was not always keen on supporting the Government, and certainly not during her second term in the House. However, she saw what was good for her constituentsthe tenantsand the transfer was made from Peterborough city council to Cross Keys Homes.
	We support such proposals, but we are concerned about the intimation from the hon. Member for Great Grimsby, who told us about the ballot in Great Grimsby, that the new clause was a means of blocking further stock transfers, rather than a commitment to a more [ Interruption. ] If he wishes to intervene on me, I am more than happy to be corrected.

Austin Mitchell: That is quite untrue. I gave no such intimation, and I had no such thought. It is a gross misinterpretation of what I said.

Stewart Jackson: Sheffield is obviously hit by a plague of locusts on a regular basis, because the hon. Gentleman takes an apocalyptic view of the situation. One thing does not necessarily follow the other.
	I do not agree with the hon. Gentleman, because it is incumbent on the official Opposition at least to give the Government a chance to make their case by virtue of the review. The House will know that the right hon. Member for Pontefract and Castleford (Yvette Cooper), the previous Minister for Housing, promised a review of all council housing subsidies at the end of last year. On that basis, it would be wrong to support the provision before we have more information about the success and efficacy of the pilot scheme and the review of the HRA subsidy. I accept what hon. Members have said about the delay and the time that it has taken to establish a review, but one is now under way, so it would be precipitate of us to go ahead and join some Labour Members in the Lobby in support of new clause 8, notwithstanding the eloquent comments of my hon. Friend the Member for Poole, and the speeches of the right hon. Member for Oldham, West and Royton (Mr. Meacher) and the hon. Members for North Southwark and Bermondsey, and for Hayes and Harlington, all of whom made strong, persuasive points. At this stage, it is sensible, rational and responsible to wait for the outcome of the review before making a decision. We should not make a knee-jerk or precipitate response on the housing revenue account.

Iain Wright: This is the first time that I have sparred over the Dispatch Box with the hon. Member for Peterborough (Mr. Jackson). I welcome him to the Front Bench and wish him well in his new role.
	There has been a huge debate on the first group of amendments. Let me start at the beginning, which seems a long time ago, with new clause 9, tabled by the right hon. Member for North-West Hampshire (Sir George Young). He will recall that we had an interesting debate on a similar topic in Committee in January. I am pleased that it has been raised again, so that I have the opportunity to update the House on our progress since then and my plans for moving matters forward.
	In responding to the amendments and the other points that have been raised, I am conscious of the need to address incredibly important points in other parts of the Bill, so I will seek to achieve a balance between responding to the comments of hon. Members and making progress with the Bill.
	New clause 9 does two things. First, it prevents registered social landlords from everI stress the word everusing ground 8 in possession proceedings. Secondly, it provides that a court should not grant possession to any landlord under ground 8 if any of the arrears arose as a result of delays or failures in housing benefit payments, unless it considers that it is reasonable to do so.
	The Government have already made it clear that for registered social landlords eviction should be used only as a last resort in rent arrears cases, particularlyI stressed this in Committeewhere the arrears have occurred as a result of delays in housing benefit payments. Good practice guidance published in June 2005 on improving the effectiveness of rent arrears management included advice and best practice on early intervention policies and proactive approaches. The Housing Corporation also issued housing management guidance in early 2007 which stated:
	Possession proceedings for rent arrears should not be started against a tenant that can demonstrate they have a reasonable expectation of eligibility for housing benefit; provided the local authority with all the evidence required to process a housing benefit claim; and paid required personal contributions towards the charge.
	A pre-action protocol for rent arrears has also been established as part of the civil procedures rules, with the aim of ensuring that eviction is the last resort for all landlords in rent arrears cases. The protocol sets out various measures that social landlords must take before starting possession proceedings on the basis of rent arrears. However, both in Committee and on the Floor of the House today, the right hon. Gentleman made a strong case, and I recognise that there remain concerns about the actions of a small minority of RSLs and other private sector landlords. I am keen to ensure that those are resolved.
	I have therefore asked my officials to convene a working group meeting with the key stakeholders, including Shelter, Citizens Advice, the National Housing Federation, the Council of Mortgage Lenders and the Housing Corporation to examine those concerns and report back to me by summer, recommending options for a way forward. In light of the regulatory framework that we are putting in place, I am particularly interested in the role that Oftenant could play in addressing the problem for the registered social landlord sector. The reformed system of regulation, which will give a stronger voice to tenants to bring issues of concern to the regulator and a more targeted system of regulatory action, seems a good approach to dealing with the matter.
	In addition, as I stated in Committee, the private rented sector review being led by Julie Rugg of the university of York will look at the issue in relation to the private sector. The review is due to be published in October this year. Given my commitment, I hope that the right hon. Gentleman will withdraw the motion.
	I turn to the central element of today's debatenew clause 8, to which my hon. Friend the Member for Great Grimsby (Mr. Mitchell) spoke so excellently. I shall deal with the narrow point, then go on to the wider point, the financing of council housing, which is the subject of the debate. With the greatest respect to my hon. Friend and to my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher) and my hon. Friend the Member for Hayes and Harlington (John McDonnell), who reiterated many of the points that they made on Second Reading, new clause 8 would have no impact on the way that the Secretary of State carries out her existing statutory duties. In that respect it is unnecessary.
	New clause 8 would require the Secretary of State to take certain matters into account when determining what subsidy to give to local authorities to support their housing revenue accounts. In particular, it would require her to consider the resources needed to meet the decent homes standard and the need for affordable housing. But the Secretary of State is already required by public law to act reasonably in making the annual subsidy determination and to take into account all relevant considerations. Those considerations would include both housing needs and the resources available.

Paul Holmes: Could the Minister therefore explain why your own studythe Department's own study published two weeks ago, with six pilot councils drawn from cities and rural areas, a good cross-section, shows that you are underfunding those six authorities by 40 per cent.? How can the Government be taking those considerations into account?

Iain Wright: My right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) made the excellent point that there was something like a 20 billion backlog and appalling standards. People were living in slums in local authority sectors. We have provided sustained investment in social housing, combined with private funding, to provide about 500,000 new kitchens, 500,000 new windows so that people are able to save on fuel bills and achieve greater energy efficiency, and 918,000 new central heating systems. One million childrenthe equivalent of a city the size of Birminghamhave been lifted out of inadequate social housing. That is a record that we should be proud of, and the hon. Gentleman should appreciate the size of the backlog that we have had to address over the past 10 years.

Iain Wright: Let me address that point, which relates to the central point of the debate, about what system we should use to finance council housing. Let me put the debate in the context of the Bill. Clause 297 will enable us to exclude specified properties within a council from the housing revenue account subsidy system. We intend to use that power to allow councils to apply to exclude new homes that they build from being added to the housing revenue account. That will create an incentive among councils to build new homes by giving them more income from such properties. That issue seems to have cross-party consensus.
	As a former borough councillor, somebody who was proud to serve on my local authority, I think that councils have a range of roles with regard to housing. One is key: place shaping. Councils know what is needed in their areas and provide strategic housing assessments to determine the type of houses required and where they should be. They also have a direct delivery role. I am excited that the Bill, in conjunction with other things such as the housing revenue account review that, as Minister for Housing, my right hon. Friend the Member for Pontefract and Castleford (Yvette Cooper) announced in December, will move us into an exciting new era, in which we look fundamentally at how we finance council housing and, crucially, make sure that councils have that direct delivery role. I am proud to stand at this Dispatch Box and say that this is the return of the council house. I hope that the hon. Member for Chesterfield (Paul Holmes) will agree.

Paul Holmes: I thank the Minister for giving way; he is being very generous. My point is simply that councils should be treated as housing associations are. If the 10,000 council houses in Chesterfield were transferred to a housing association, they would be treated in an utterly different way financially. Let the council be treated the same as the housing association. Is the Bill a revolution in council housing? The impact statement for the Bill says that 2,500 houses are involvedthat is, an average of five per constituency. That is not a revolution in council housing.

Iain Wright: I hope that I am making it clear to my hon. Friend that I am not saying that councils do not have a role. As I said, it is important that they have a strategic role in assessing the housing needs in their area and coming to a view as to what particular types of housing are required, whether it is housing for older people or accommodation for young families. That is the sort of thing that we need to be doing through the planning system. However, I genuinely believe that there is also a role for councils to have a direct delivery route. I hope that she will be encouraged by what we are doing in the Bill to move forward further and faster. The review of the housing revenue account subsidy system will make recommendations as to how we can fund that. The key point is how we increase transparency and fund this to ensure that everybody gets a fair deal. That is not as easy as has been suggested in the House today.

Lynne Jones: Given my hon. Friend's assurances, would he care to hazard a guess as to how many additional council homes we will be building at the time of the next election?

Jeremy Corbyn: I thank the Minister for giving way, and for the meeting that he held with a number of colleagues concerning this matter. Does the legislation, which he supports, allow local authorities to have a case-by-case analysis of the needs of leaseholders when major works are done? Like every other Member of this House, I have many poor constituents, who bought their properties under right to buy in the 1980s and simply cannot afford the requirements for the capital costs of new roofs and so on. We need a degree of flexibility when dealing with this matter.

Iain Wright: I would certainly be happy to look at the matter on that basis because I am keen to ensure that we do something about it. I am concerned that in the constituencies of my hon. Friends the Member for Islington, North (Jeremy Corbyn) and the Member for Regent's Park and Kensington, North, people are sufferingoften the most vulnerable in society, for whom we need to do morebecause of that problem. The provisions in the Bill help with that process as much as possible, and they help local authorities to provide flexible consideration on the ground, dictated by local circumstances. I take the point about existing leases, and I would be happy to meet the hon. Member for North Southwark and Bermondsey (Simon Hughes) to discuss it.
	On the hon. Gentleman's new clause 31, we all agree that leaseholders should have a fair deal when it comes to service charges, but we want to ensure that they contribute their fair share to those charges. That is why we have put in a place a system of safeguards and measures that make people aware of what they are taking on when they buy a leasehold property and that involve them in decisions about works to their property. Provisions in the Landlord and Tenant Act 1985, which were amended by the Commonhold and Leasehold Reform Act 2002, already cover much of what is proposed by the hon. Member for North Southwark and Bermondsey. As the House will be aware, there are statutory requirements for all landlords, including those in the local authority and the social sector, to consult their leaseholders before carrying out works in their buildings and estates. Those requirements cover much of what is proposed in the new clause, including the requirement for landlords to give reasons for works, to provide details of works to leaseholders, to have regard to tenants' observations, and to obtain nominations for potential contractors. On that basis, I suggest that the new clause is not necessary.
	Amendment No. 145, which would amend section 105 of the Housing Act 1985, would introduce a duty for local authorities to seek the views of secure tenants when the Secretary of State was conducting a public consultation on housing management where a response was made by the authority. The amendment would require landlords to consult tenants on all national Government consultations that affect them when the landlord intends to respond. From the face of the hon. Member for North Southwark and Bermondsey, he appears to agree with me that that is unnecessary and an unmanageable burden, without any real benefits to tenants, especially given that we already have excellent and effective consultation procedures nationally. I therefore hope that the hon. Gentleman will not press that amendment.
	Let me deal with amendments Nos. 14 and 15, which the hon. Member for Montgomeryshire (Lembit pik) tabled. I want to consider Government amendments Nos. 40 to 43 at the same time because I believe that our amendments, especially amendments Nos. 40 and 42, would achieve the same thing. Government amendments Nos. 40 to 43 are designed to do three things. First, they would ensure that, when a landlord or tenant makes a request to the district valuer for a review of his valuation of a property for right-to-buy purposes, the request and the reason supporting it should be in writing.
	Secondly, the amendments would clarify that the determination of value can be reviewed only if the sale has not been completed. I suggest that that is almost exactly the same as amendments Nos. 14 and !5, which reflect a suggestion, as the hon. Gentleman eloquently pointed out, that the London councils' representative body made. I am glad that we can all agree on that sensible suggestion.
	Thirdly, our amendments are designed to ensure that, in the review process, which clause 290 introduces, the district valuer knows the date from which specified time limits are calculated. Clause 290 will allow district valuers to withdraw determinations of value and make new ones if they decide that their original valuation was factually flawed, acting either on their initiative or in response to a request from the landlord or the tenant. The aim is to make the right-to-buy valuation procedure more responsive to particular circumstances. At present, wrong valuations based on errors of fact cannot be corrected without court action. On that basis, I hope that the hon. Gentleman will

Alistair Burt: I am grateful to the Under-Secretary for that kind remark. It is now quarter past eight and we have been discussing the first group of amendments for about four hours. There has been no time wasting. With five more substantial groups of amendments to cover, not enough time has been allocated. Before he sits down, will he tell the House that he will not press the matter to a conclusion with the end of Report and Third Reading but sort out more time with the usual channels? Does he appreciate how welcome that would be to the House? He must be as worried as anyone about the fact that we cannot deal with a substantial range of amendments in the way in which I know he would wish to do.

Mr. Deputy Speaker: With this it will be convenient to discuss the following:
	New clause 32 Definition of 'community land trust'
	'Community land trust means a non-profit organisation which is an industrial and provident society, a company limited by guarantee or other incorporated body whose governing instrument contains provisions to the following effect
	(a) the primary purpose of the organisation is to hold land and other assets in order to promote the social, economic and environmental sustainability of a specified local geographic community by providing or facilitating the provision of affordable or other sub-market housing or other community-based facilities and services,
	(b) the organisation will not dispose of its land and other assets save in the furtherance of its objectives as set out in paragraph (a),
	(c) the membership of the organisation is open to organisations which are located in or persons whose principal place of residence, work or business is located in the specified community the organisation is established to serve (although the organisation may have different classes of membership),
	(d) over 50 per cent. of the governing body is elected by the members of the organisation,
	(e) the organisation is accountable to the local community through annual reporting or otherwise, and is responsive to the local community's needs and to representations made on its behalf, and
	(f) it is an organisation established to help enable the community and those who live or work there to benefit from the land or other assets it holds.'.
	New clause 33 Duty to monitor and promote re-use of brownfield land
	'(1) The HCA must identify, collate and publish up-to-date information on the availability, including type and location, of brownfield land in England at district, regional and national level.
	(2) The HCA must keep this data under review and publish its findings annually.
	(3) The HCA must promote the re-use and reclamation of brownfield land by acting as the Government's statutory adviser on brownfield land, by providing advice and grants and by commissioning, undertaking or supporting research and other projects to further best practice.
	(4) In this section brownfield land means land which has previously been developed.'.
	Government amendments Nos. 16 and 17.
	Amendment No. 151, page 2, line 4, in clause 2, at end insert
	'(d) to facilitate the provision and supply of home ownership including, in particular, low cost home ownership through community land trusts.'.
	Government amendments Nos. 18 to 24.
	Amendment No. 1, page 11, line 38, in clause 22, at end insert
	'(1A) Local authorities shall be eligible for financial assistance under subsection (1).'.
	Government amendment No. 60.
	Government amendment No. 25.
	Amendment No. 229, page 15, line 17, in clause 34, leave out from 'HCA' to end of line 18 and insert
	'must exercise its functions with the objective of contributing to sustainable development.
	(3) The Secretary of State may issue guidance to the HCA for the purposes of this section and the HCA must have regard to any guidance so issued.'.
	Amendment No. 207, page 15, line 22, in clause 35, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 208, page 15, line 23, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 209, page 15, line 27, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 210, page 15, line 29, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 211, page 15, line 33, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 212, page 15, line 35, leave out 'low cost rental accommodation' and insert 'social housing'.
	No. 213, page 15, line 38, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 214, page 15, line 40, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 215, page 16, line 1, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 216, page 16, line 3, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 217, page 16, leave out line 9 and insert
	'social housing has the meaning given by section 69.'.
	Government amendments Nos. 135 and 136.
	Amendment No. 137, page 21, line 11, in clause 48, at end insert
	'(1A) The Secretary of State may give guidance to the HCA to ensure that, in exercising its powers, the HCA does not expose any person to any risk to their health arising from exposure to electric and magnetic fields with a frequency of between 30 and 300 Hertz.'.
	Amendment No. 138, page 21, line 28, in clause 49, at end insert
	'(1A) The Secretary of State may give a direction to the HCA to ensure that, in exercising its powers, the HCA does not expose any person to any risk to their health arising from exposure to electric and magnetic fields with a frequency of between 30 and 300 Hertz.'.
	Government amendment No. 26.
	Amendment No. 139, page 39, line 6, in clause 88, at end insert
	'(3A) Pursuit of Objective 2 includes, but is not limited to, protection from the risks to health arising from exposure to electric and magnetic fields with a frequency of between 30 and 300 Hertz.'.
	Amendment No. 140, page 39, line 29, at end insert
	'(15) The Secretary of State may add to or amend the regulator's fundamental objectives as the Secretary of State thinks appropriate.'.
	Amendment No. 141, page 40, line 32, at end insert '; and
	(c) specify the proportion of housing built within 60 metres, measured in any direction, of an overhead transmission line.'.
	Amendment No. 142, page 72, line 41, in clause 180, leave out ', and'.
	Amendment No. 143, page 72, line 42, at end insert ';
	(m) the distance of housing from any overhead transmission line; and
	(n) the levels of electric and magnetic fields with a frequency of between 30 and 300 Hertz permitted in housing.'.
	Amendment No. 144, page 101, line 15, in clause 261, at end insert
	'overhead transmission line means any electric line above ground which carries or is capable of carrying electricity at or more than 275 kiloVolts,'.
	Amendment No. 233, page 138, line 13, in schedule 1, after 'year', insert
	', including how it has contributed to the achievement of sustainable development,'.
	Government amendments Nos. 27 and 28.

Martin Horwood: I should like to speak in support of new clauses 32 and 33, amendments Nos. 175, 229 and 233 and any other measures to increase the value of democracy and sustainability in the Bill.
	The Minister appeared to argue in Committee against limits on the powers of the Homes and Communities Agency, which seems to have extremely sweeping powers. Clause 3 is an extraordinary clause and defines the Principal powers of the HCA as the power to do
	anything it considers appropriate for the purposes of its objects or for purposes incidental to those purposes.
	That must be the most broadly drawn principal power ever seen in the House. The HCA also has powers to facilitate the development of land, to acquire land compulsorily and to
	dispose of land held by it in any way it considers appropriate.
	Those are major powers.
	However, the Minister said in Committee that restrictions were unnecessary, because
	Any development would have to be in accordance with the development plan. [Official Report, Housing and Regeneration Public Bill Committee, 15 January 2008; c. 269.]
	He said just now that local councils should still have a major role in place shaping, yet I fear that in having a national agency with such powers, as opposed to a local development agency, we may see local authorities' place-shaping and other powers being degraded. The question is: what kind of development plan will have to be conformed with? The Minister might be talking about the new local development frameworks, but I would not fancy putting one of those in the ring against the Homes and Communities Agency. He might also be talking about regional spatial strategies, which are now coming forward with a great deal of detail in local planning from unelected regional assemblies.
	In the south-west, we are in the latest stage of an almost endless consultathon, with the examination in public panel report, which has blithely dismissed some strongly held local views and is an example of how unelected quangos and Government-appointed inspectors can run away with their own sense of self-importance at the expense of local people's views. The examination in public panel report for the south-west describes land at
	the foot of Leckhampton Hill,
	next to my constituency,
	which marks part of the western extent of the Cotswolds and is a local beauty spot of some historical interest. There are panoramic views both to and from the hill which include views across part of the Leckhampton/Shurdington land and of Cheltenham itself. A large number of draft RSS representations relate to this land and the Panel is left in no doubt that the Hill and the views from it are an amenity much appreciated by local people.
	Yet four paragraphs later all those concerns and all that respect for the local area are blithely dismissed. The panel simply says:
	We are also content, from our own inspection of the area, that there is scope for sustainable development here without harm to the AONB, the outlook from Leckhampton Hill or to the local environment. Regional Flood Risk appraisal has cleared the way for any flooding issue to be addressed through later strategic flood risk appraisal.
	Presumably the panel did not see the area when it was all under water last July.
	Strongly held local views are being dismissed by such quangos after years of earlier consultation in which local elected and community representatives were more or less of one mindstrongly in favour of more social housing, more urban regeneration and more appropriate small developments around villages, whose shops, post offices and schools are dying through a lack of people, and in general opposed to urban extensions around already affluent towns such as Cheltenham. What do we get in draft after draft of the regional spatial strategy? We get urban extensions around already affluent towns, where, historically, large quantities of land have already been released over decades, with no discernable impact on relative house prices.

Martin Horwood: The Minister has put his finger on one of the key problems with the Bill. In trying to reassure the House that the Bill provides enough safeguards, democratic measures and for sustainability relating to the new agency, he refers us to a letter from its designated chair and not to any provision in the Bill. If we are simply to rely on the good will of an appointed official, that is not good enough.
	As I say, I do not have any confidence that the Homes and Communities Agency will ever side with local people who have local knowledge, or with local elected representatives, against the faceless bureaucrats and Government inspectors who are simply doing the Government's bidding and ignoring important democratic and environmental factors. Amendments Nos. 175, 229 and 233 and new clauses 32 and 33 would go some small way towards addressing that imbalance and I strongly support them.

Grant Shapps: I should like to sing the praises of new clause 32, which I think will have some backing in all parts of the House. It is all about community land trusts. The Minister will remember that in Committee we had a bit of discussion about CLTs and whether they could prosper if they were legally defined as an entity. As he knows, the purpose of CLTs is to ensure that affordable and other sub-market housing is available to people at below market rents or costssomething of which I think he would approve. That would make a great deal of sense in an environment where we are trying to do everything possible to provide low-value and affordable housing. In some areas of the country, local people are effectively priced out of the housing market because house prices are not at the national average, which is eight or 10 times salary, but are 20 times the local average salary. Community land trusts can do a great deal to assist in that regard, and new clause 32 seeks legally to define the CLTs once again.
	The Minister told us in Committee that it was not necessary to define CLTs, as that would not be of any great advantage to them; he said that legislation already provides for them and that they are already being created, and that that proved that the Bill did not need to address the issue of definition in any greater detail. However, I have since discovered that he is wrong. I recently visited a good CLT in Cornwall, where a group of residents have got together and have managed to purchase some land. It is called a self-built community land trust. I commend it to him; it is in the village of Rock. The Minister will be interested to hear that when I say self-built, that is what I mean. At 5.30 pm when the residents have finished work, and at the weekend, they go and build the community themselves, literally.
	The residents spent a full year trying to get funding for that very sound project. There was no real reason why they should not get funding; it was nothing to do with the more recent credit crunch. The reason why they could not get the funding was that no commercial organisation understood what a CLT was. That is despite the fact that the residents had the backing of their local housing association, which was trying to explain the situation. When lending societies looked at the plan they could not get their heads around it, because community land trusts are not defined anywhere in law. Along with amendment No. 151, new clause 32 would solve that problem.

Iain Wright: That is an important point. The presumption is always to have brownfield development, and we have been very successful in that regard over the past 10 years: some 75 per cent. of development is now brownfield. However, my hon. Friend makes the point that we must not accept the myth that brownfield is essentially factories and that greenfield is the rolling, beautiful hills of the English countryside. That is not the case, and the agency needs to have the flexibility to be able to allow an area that is designated as greenfield to be classed as just shrubbery if it can be built on without any loss to the bio-environment. With regard to planning and sustainability, we could in many respects go further and faster to make sure we attract better biodiversity. I therefore agree with my hon. Friend on this matter.
	The Government have tabled amendments Nos. 18, 27 and 28 to take account of the importance of London in the national housing market, and its particular governance arrangements. The amendments place the agency under a duty to have regard to the Mayor's recommendations contained in the London housing strategy. They will enable the Mayor to recommend to the Secretary of State how much money should be allocated to the HCA in respect of housing in Greater London. They will also enable the Mayor to recommend to the agency how it should exercise its functions of giving housing financial assistance in Greater London, including such matters as the amounts that should be given for different purposes and the number, type, tenure and location of houses that should be provided through housing financial assistance. We are providing the Mayor with more scope to shape the nature of housing and regeneration in Londonthat will be a key priority for Ken Livingstone as he secures a third term as Mayor in the next few weeks. All this is also consistent with our recent announcement of the proposal that the agency is to establish a London sub-committee to be chaired by the Mayor, and with the chief executive of the agency, Sir Bob Kerslake, as its vice-chair.
	On that basis, London's interests are appropriately served, which is why I cannot accept the Liberal Democrat amendment No. 230, proposing a seat on the national HCA board for a representative from London local authorities. I am keen to avoid narrow sectional interests at board level. An approach such as that which the amendment proposes would prevent full representation from other interest groups; all might be perfectly reasonable and have a perfectly valid case, but be impossible to accommodate. Such a move would make the board unwieldy and hinder its ability to deliver the necessary improvements in housing supply and quality, and in regeneration, investment and infrastructure. On that basis, I hope the amendment will be withdrawn.
	I was interested in a point made by the hon. Member for Welwyn Hatfield (Grant Shapps), who does not appear to be listening at present. Community land trusts are very important. I have a vested interest, as I have one in my constituency. I pay tribute to my hon. Friend the Member for Stroud (Mr. Drew) for the assiduous work he has been doing to ensure that CLTs are an essential part of the housing offer for the 21st century. However, nothing that was said on this matter changed the opinion I formed in Committee, which is that we do not want to prescribe too overtly with regard to the various mechanisms by which the agency might help to deliver housing. CLTs are an important part of the new environment. There are real benefits in retaining land in order to ensure that we have affordable housing and renting in perpetuity, but we must be aware of the future-proofing issue.

Iain Wright: I reiterate what I said about my respect for my hon. Friend on this matter. I am keen to see CLTs work incredibly well in the next few months and years. I have one in my constituency, and it is important.
	A concern that I had in Committee and when I met CLT representatives in February was this need to avoid future-proofing in terms of the agency. I stand by my statement in Committee that I am a big fan of local housing companies, whereby local authorities provide the land and private developers provide the construction skills in a joint venture, but I would not want to include that provision in the Bill either. I am interested in the experiences that the hon. Member for Welwyn Hatfield has had with regards to Cornwall, and I am keen to invite him to a meeting to discuss those.
	One of the key things that we must do relates to a slightly wider and perhaps more fundamental point. Given the economic difficulties across the Atlantic and the relatively risk-averse nature of financial institutions, how can we still inspire confidence in the financial markets in order to help to build the housing that we need? My right hon. Friend the Minister for Housing will play a key role in inspiring lender confidence through the meetings that she has. We need to address that risk-averse nature; it is important that we do that. I am keen to work with all those available to help that to happen. I am keen to discuss a way forward on the particular circumstances mentioned by the hon. Member for Welwyn Hatfield, and I hope he would agree with me on that basis. If he wishes to intervene, I would be happy to give way, but I now want to bring my hon. Friend the Member for Luton, South (Margaret Moran) into the discussion.

Grant Shapps: I appreciate the Minister's consensual approach to the Billwe had the same approach in Committeebut I am not convinced by his argument. He is arguing that there is a great deal of uncertainty in the market, but he is failing to do the one thing in the Bill that would create certainty. He is failing to include in it a provision about what a community land trust is. We describe all sorts of things in law, and many things are described in this piece of legislation. He has no problems tabling 147 amendments to the Bill today. The one new clause that I am discussing could do a great deal of good for CLTs, and I would have thought that he would welcome it. I am not convinced that I should seek to withdraw it.

Amendments made: No. 16, in page 2, line 2 leave out 'and'.
	No. 17, in page 2, line 4, at end insert 'and
	(d) to contribute to the achievement of sustainable development in England,'. [Liz Blackman.]

Amendments made: No. 19, in page 9, line 31, after 'time', insert 'and subject as follows'.
	No. 20, in page 9, line 39, leave out 'any occupied' and insert 'the'.
	No. 21, in page 9, line 40, leave out 'the occupier' and insert
	'every owner or occupier of the land'.
	No. 22, in page 9, line 41, at end insert
	'(2A) A notice under subsection (2)(b) must
	(a) state the purpose for which entry is required, and
	(b) inform the person to whom it is given of the person's rights under this section and, if applicable, section 20.'.
	No. 23, in page 10, line 9, at end insert
	'(6A) In subsection (2)(b) owner has the same meaning as in the Acquisition of Land Act 1981 (c. 67).'. [Liz Blackman.]

Amendments made: No. 135, in page 16, line 25, leave out 'the social housing assistance' and insert
	'any social housing assistance given by way of grant'.
	No. 136, in page 16, line 28, at end insert
	'(4A) The HCA may not specify an amount which exceeds the recoverable amount.
	(4B) The recoverable amount is
	(a) the total amount of grant received by the person to whom the direction is given, less
	(b) the total of any amounts applied, appropriated or paid in accordance with any previous directions given to the person under subsection (4),
	and for the purposes of paragraph (b) any interest provided for by virtue of section 37(1) is to be ignored.
	(4C) Subsection (4A) is without prejudice to the power of the HCA under section 37(1).'. [Liz Blackman.]

Amendments made: No. 62, in page 33, line 43 , leave out first 'accommodation' and insert 'property'.
	No. 63, in page 33, line 43, leave out second 'accommodation' and insert 'property'.
	No. 64, in page 34, line 1, leave out 'accommodation' and insert 'property'.
	No. 65, in page 34, line 3, leave out 'accommodation' and insert 'property'. [Liz Blackman.]

Amendments made: No. 68, in page 51, line 29, leave out 'non-profit'.
	No. 69, in page 51, line 30, at end insert
	'(1A) A direction may be given to a profit-making registered provider only in so far as its accounts relate to social housing activities.'. [Liz Blackman.]

Amendments made: No. 72, in page 55, line 25, at end insert
	'(d) section [companies exempt from audit].'.
	No. 73, in page 55, line 28, at end insert
	'(c) section [exempt companies: extraordinary audit].'. [Liz Blackman.]

Amendments made: No. 74, in page 56, line 9, leave out 'non-profit'.
	No. 75, in page 56, line 10, leave out 'non-profit'. [Liz Blackman.]

Amendments made: No. 77, in page 57, line 27, leave out 'making of an order' and insert 'presenting of a petition'
	No. 78, in page 57, line 30, at end insert
	
		
			 'But not the presenting of a petition by the directors or other governing body of the registered provider'.  
		
	
	No. 79, in page 57, line 34, at end insert
	
		
			 'A decision by the directors or other governing body of a registered provider to present a petition for winding up where the registered provider is (a) a registered company, or (b) an industrial and provident society.[ Liz Blackman.] The directors or governing body'.

Amendments made: No. 80, in page 58, line 1, after '28', insert 'working'.
	No. 81, in page 58, line 6, after 'provider', insert
	'whom the regulator is able to locate after making reasonable enquiries'.
	No. 82, in page 58, line 19, leave out paragraph (b) and insert
	'(b) such of its secured creditors as the regulator is able to locate after making reasonable enquiries.'. [Liz Blackman.]

Amendments made: No. 85, in page 59, line 30, after 'by', insert '
	(a) section [right to acquire], or
	(b) '.
	No. 86, in page 59, line 31, after 'housing', insert 'in Wales'. [Liz Blackman.]

Amendments made: No. 87, in page 60, line 23, leave out 'its secured creditors' and insert
	'such of its secured creditors as the regulator is able to locate after making reasonable enquiries'.
	No. 88, in page 60, line 31, leave out 'of a registered provider agrees to' and insert
	'to whom proposals were sent agrees to the'.
	No. 89, in page 60, line 34, after 'creditor', insert 'to whom the proposals were sent'.
	No. 90, in page 60, line 38, after 'creditors', insert
	'to whom the original proposals were sent'.
	No. 91, in page 61, line 6, after 'creditors', insert
	'to whom the original proposals were sent'. [Liz Blackman.]

Amendment made: No. 92, in page 62, line 33, after 'society', insert '
	(a) an instrument providing for the amalgamation of the society with another industrial and provident society, or
	(b) .'.
	No. 93, in page 62, line 33, at end insert
	'(2A) An instrument providing for the amalgamation of a society (S1) with another has the same effect as a resolution by S1 under section 50 of the Industrial and Provident Societies Act 1965 (c. 12) (amalgamation of societies by special resolution).'.
	No. 94, in page 62, line 38, leave out from 'Authority' to end of line 39 and insert
	'(4A) An instrument does not take effect until the copy is registered.'. [Liz Blackman.]

Amendments made: No. 95, in page 68, line 2, after 'under', insert '
	(a) section [right to acquire], or
	(b) '.
	No. 96, in page 68, line 2, leave out '(as applied by section 172)' and insert
	'(tenant's right to acquire social housing in Wales)'. [Liz Blackman.]

Amendments made: No. 98, in page 69, line 35, leave out 'shall continue to have effect in relation to social housing in England' and insert
	'apply in relation to disposals of social housing by registered providers'.
	No. 99, in page 69, line 36, leave out 'in subsection (3)' and insert 'below'.
	No. 100, in page 69, line 41, at end insert 'and'.
	No. 101, in page 69, line 42, leave out from '(supplemental)' to end of line 43.
	No. 102, in page 70, line 1, leave out subsection (3) and insert
	'(3) In those provisions
	(a) references to a registered social landlord shall be treated as references to a registered provider,
	(b) references to consent given by the Welsh Ministers under section 9 of the 1996 Act shall be treated as references to consent given by the regulator under section 166 of this Act,
	(c) references to the Welsh Ministers in connection with a power to make orders or regulations shall be treated as references to the Secretary of State,
	(d) in section 12(5)(b) of the 1996 Act the reference to the Welsh Ministers shall be treated as a reference to the HCA, and
	(e) references to a resolution of the National Assembly for Wales shall be treated as references to a resolution of either House of Parliament.
	(4) This section does not affect the continued application of the provisions listed in subsection (2) in relation to disposals made before this section comes into force.'. [Liz Blackman.]

Amendments made: No. 103, in page 70, line 30, leave out 'and'.
	No. 104, in page 70, line 33, at end insert ', and
	(c) section 173 of the Local Government and Housing Act 1989 (c. 42) (consent to certain disposals of housing obtained from new town corporations).'. [Liz Blackman.]

Amendments made: No. 106, in page 72, leave out line 21.
	No. 107, in page 72, line 26, leave out paragraphs (a) and (b).
	No. 108, in page 72, line 42, at end insert
	'(3) In setting standards the regulator shall have regard to the desirability of registered providers being free to choose how to provide services and conduct business.'. [Liz Blackman.]

Amendments made: No. 111, in page 73, line 30, leave out 'or'.
	No. 112, in page 73, line 31, at end insert ', or
	(c) to have regard to specified objectives when setting standards under section 180 or 181.'.
	No. 113, in page 73, line 31, at end insert
	'(1A) The Secretary of State may give a direction under subsection (1)(a) or (b) only if it relates, in the Secretary of State's opinion, to
	(a) quality of accommodation,
	(b) rent, or
	(c) involvement by tenants in the management by registered providers of accommodation.'.
	No. 114, in page 73, line 40, at end insert
	'(3A) Before giving a direction about a standard which would apply to charities the Secretary of State must consult the Charity Commission.'. [Liz Blackman.]

Amendments made: No. 115, in page 78, line 23, leave out subsections (2) and (3) and insert
	'(2) An amendment of the society's rules requires consent if it
	(a) alters the society's objects,
	(b) makes provision about the distribution of assets to members, or
	(c) enables the society to become, or cease to be, a subsidiary or associate of another body.
	(3) An amendment of the rules which requires consent is effective only if the regulator has first consented.
	(3A) The regulator may not consent to an amendment which it thinks would turn the society into a profit-making organisation.
	(3B) The society must notify the regulator of an amendment of the rules which does not require consent.'.
	No. 116, in page 78, line 28, at beginning insert
	'In relation to an amendment which requires consent'.
	No. 117, in page 78, line 31, at beginning insert 'The preceding provisions of'.
	No. 118, in page 78, line 31, leave out 'it' and insert 'they'.
	No. 119, in page 78, line 31, at end insert
	'(6) The Secretary of State may by order amend the list in subsection (2).'.  [Liz Blackman.]

Amendments made: No. 120, in page 79, line 3, leave out subsections (2) and (3) and insert
	'(2) An amendment of the company's articles of association requires consent if it
	(a) alters the company's objects,
	(b) makes provision about the distribution of assets to members, or
	(c) enables the company to become, or cease to be, a subsidiary or associate of another body.
	(3) An amendment of the articles of association which requires consent is effective only if the regulator has first consented.
	(3A) The company must notify the regulator of an amendment of the articles of association which does not require consent.'.
	No. 121, in page 79, line 9, at end insert
	'(4A) The company must notify the regulator
	(a) of an amendment of the articles of association which does not require consent, or
	(b) of a change to its name or registered office.'.
	No. 122, in page 79, line 10, at beginning insert
	'In relation to an amendment which requires consent'.
	No. 123, in page 79, line 12, at end insert
	'(6) The Secretary of State may by order amend the list in subsection (2).'.  [Liz Blackman.]

Amendments made: No. 33, in page 121, line 6, after '3', insert 'or 3A'.
	No. 34, in page 121, line 8, leave out 'sub-paragraph (2) of that paragraph' and insert 'sub-paragraph (1A);
	(aa) any provision in the lease for the tenant to acquire the landlord's interest provides for the tenant to acquire the interest on terms specified in the lease and complying with such requirements as may be prescribed;
	(ab) the lease meets any other prescribed conditions;
	(ac) the lease does not fall within any prescribed exemptions'.
	No. 35, in page 121, line 10, at end insert
	'(1A) The conditions referred to in sub-paragraph (1)(a) are that the lease
	(a) was granted for a term of 99 years or more and is not (and cannot become) terminable except in pursuance of a provision for re-entry or forfeiture;
	(b) was granted at a premium, calculated by reference to the value of the house or the cost of providing it, of not less than 25 per cent, or such other percentage as may be prescribed, of the figure by reference to which it was calculated;
	(c) provides for the tenant to acquire additional shares in the house on terms specified in the lease and complying with such requirements as may be prescribed;
	(d) does not restrict the tenant's powers to mortgage or charge his interest in the house;
	(e) if it enables the landlord to require payment for outstanding shares in the house, does so only in such circumstances as may be prescribed; and
	(f) states the landlord's opinion that by virtue of this paragraph the lease is excluded from the operation of this Part of this Act.'.
	No. 36, in page 121, line 24, leave out 'paragraph 3(2)' and insert 'sub-paragraph (1A)'.
	No. 37, in page 121, line 25, leave out 'paragraph 3(2)(g)' and insert 'paragraph (f) of that sub-paragraph'.
	No. 38, in page 121, leave out lines 30 to 32.
	No. 39, in page 121, line 41, at end insert
	'(2) In paragraph 5 of that Schedule to that Act (power to prescribe matters by regulations)
	(a) in sub-paragraph (1) for Secretary of State substitute appropriate national authority, and
	(b) in sub-paragraph (2)
	(i) in paragraph (b) for Secretary of State substitute appropriate national authority,
	(ii) after which insert , in the case of regulations made by the Secretary of State, and
	(iii) after Parliament insert and, in the case of regulations made by the Welsh Ministers, shall be subject to annulment in pursuance of a resolution of the National Assembly for Wales.
	(3) After paragraph 6 of that Schedule to that Act (interpretation) insert
	7 In this Schedule appropriate national authority means
	(a) in relation to England, the Secretary of State; and
	(b) in relation to Wales, the Welsh Ministers.'. [Liz Blackman.]

Amendments made: No. 40, in page 122, line 25, at end insert
	'(2A) A request under subsection (2)(b) must
	(a) be in writing;
	(b) state the reason it is being made; and
	(c) confirm that the landlord has not made to the tenant a grant of the kind mentioned in section 138(1) in respect of the claim by the tenant to exercise the right to buy in respect of the dwelling-house.'.
	No. 41, in page 122, line 26, leave out 'such a request' and insert 'a request under subsection (2)(b)'.
	No. 42, in page 122, line 38, at end insert
	'(5A) A review notice may not be served if the landlord has made a grant of the kind mentioned in subsection (2A)(c).
	(5B) A person who makes a request under subsection (2)(b) must inform the district valuer if a grant of the kind mentioned in subsection (2A)(c) is made during the period of 14 days mentioned in subsection (4).
	(5C) Subsection (5D) applies if the district valuer is considering whether to serve a review notice on the valuer's own initiative.
	(5D) The landlord or the tenant must, if requested by the district valuer, inform the valuer whether a grant of the kind mentioned in subsection (2A)(c) has been made.'.
	No. 43, in page 124, line 14, at end insert
	'(3A) After section 128(5) (notice of determination or redetermination) insert
	(5A) The landlord shall, as soon as practicable, serve a copy of the notice on the district valuer if
	(a) the district valuer requests it; or
	(b) the landlord requests a review of the determination or redetermination under section 128A(2)(b).
	(5B) The tenant shall, as soon as practicable, serve a copy of the notice on the district valuer if the tenant requests a review of the determination or redetermination under section 128A(2)(b).
	(5C) For the purposes of subsections (5A) and (5B) it does not matter whether the request in question was made before, on or after the service of the notice in accordance with subsection (5).'. [Liz Blackman.]

Amendments made: No. 44, in page 131, line 37, at end insert
	'( ) an order of the Secretary of State under paragraph 19(4) or 21(2) or (4) of Schedule (Possession orders relating to certain tenancies),'.
	No. 45, in page 132, line 5, at end insert
	'( ) an order of the Secretary of State under paragraph 16(7), 18(4), 22(2) or 23(2) of Schedule (Possession orders relating to certain tenancies),'.
	No. 46, in page 132, line 13, leave out from 'containing' to 'may' in line 14 and insert '
	( ) an order of the Welsh Ministers under section 304,
	( ) an order of the Welsh Ministers under paragraph 19(4) or 21(2) or (4) of Schedule (Possession orders relating to certain tenancies), or
	( ) regulations of the Welsh Ministers under section 266(3) or 277,'.
	No. 47, in page 132, line 17, leave out from 'containing' to 'is' in line 19 and insert '
	(a) an order of the Welsh Ministers under paragraph 16(7), 18(4), 22(2) or 23(2) of Schedule (Possession orders relating to certain tenancies),
	(b) regulations of the Welsh Ministers under Chapter 1 of Part 3 (including Schedule 8 but excluding section 266(3) or 277), or
	(c) regulations of the Welsh Ministers under section 284,'. [Liz Blackman.]

Amendments made: No. 48, in page 133, line 31, leave out '287' and insert
	'(Service charges: provision of information and designated accounts)'.
	No. 49, in page 133, line 31, after '301', insert
	'and Schedule (Service charges: provision of information and designated accounts)'.
	No. 50, in page 134, line 5, after 'Schedule 5', insert
	'or section (Possession orders relating to certain tenancies) and Schedule (Possession orders relating to certain tenancies)'. [Liz Blackman.]

Nick Raynsford: I thank my hon. Friend personally for the extremely careful attention that he gave to those issues and for agreeing to bring forward amendments dealing both with the definition of the Secretary of State's power to direct and with the role and intervention powers of the regulator. All have helped to ensure that the objectivea proportionate but hands-off style of regulationcan be carried forward. If that is achieved, we will definitely have made an improvement to the Bill.

Iain Wright: For my part, I thank my right hon. Friend for all the personal assistance that he has given me on the amendments. His work and experience have been invaluable to me.
	The amendments that we tabled address the sector's concerns. We are reinforcing the view that the Secretary of State's role should be limited to strategic directions, with direct influence only on key issues such as rent, physical maintenance and tenant empowerment, which is right. The regulator's standards should be outcome focused wherever possible, should not threaten the status of charitable providers and, crucially, should take account of the desirability of registered social landlord boards managing their own business and setting their own corporate direction.
	Finally, an important group of amendments ensure that the regulator should be able fully to intervene to address tenants' concerns only where there is a material breach of standards, including on a single estate. You might rule me out of order for mentioning this, Mr. Deputy Speaker, but that will for ever be known as the Emily Thornberry test, after my hon. Friend the Member for Islington, South and Finsbury (Emily Thornberry), who on Second Reading rightly mentioned the rat-infested estates and the lack of co-operation that housing associations have to deal with in her constituency. That group of amendments and the powers of the regulator allow it to intervene on those points, but not on minor or trivial points.
	We have improved the Bill. I pay tribute to the hon. Members for Welwyn Hatfield (Grant Shapps), for Montgomeryshire (Lembit pik) and for North-East Bedfordshire (Alistair Burt) for their fantastic work in scrutinising the Bill. It has been a pleasure to serve with them. I particularly want to thank those titans, the Privy Councillors on the Committee, the right hon. Member for North-West Hampshire (Sir George Young) and my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), who, as former housing Ministers, provided genuine expertise. Their help, co-operation and, at times, criticism have helped to improve the Bill.
	I want other hon. Members to participate in this Third Reading debate, so I conclude my remarks by saying that the Bill is an important piece of legislation. It sets in statute two new housing bodies: the Homes and Communities Agency, which will invest in regeneration and new housing supply and play a key role in achieving our ambition of delivering 3 million homes; and the new social housing regulator Oftenant, which will place tenants at the heart of social housing, driving improvements in standards.
	I am pleased by the wide consensus on the benefits of establishing of those organisations, which was clear from our Committee deliberations and the oral evidence that we took from stakeholders. We have been challenged on the details, but not the principles. The Bill leaves this place in a much better state than when it first started.

Margaret Moran: I agree with my hon. Friend that the debates in Committee were useful. One of them was about potentially amending some of the clauses dealing with domestic violence, on which he made some commitments. We tried to ensure in previous housing legislation that survivors of domestic violence would not be penalised through losing their homes and would be safeguarded under homelessness legislation, but we have apparently failed, because there is still a postcode lottery in provision and safety for them. Will my hon. Friend say briefly what he intends to do as a result of that discussion?

Grant Shapps: The Bill initially contained more than 300 clauses, and on Second Reading I mentioned its size; little did I know that down the line in Committee there would be another 242-odd Government new clauses, and that today a further 137 amendments would be tabled at the last minute, with no time to debate them properly. Today's debate demonstrated just how ineffective the House has been made to be. There was limited time to consider literally hundreds of amendments and new clauses to the Bill. It is completely unsatisfactory.
	It is not that the Bill is inherently evil, or that the Minister and the Government are intent on destroying homes and creating bureaucracies that will prevent people from being able to live in affordable housing; they just fundamentally misunderstood the best way of delivering their objectives. They know that they have a lamentable record on housing delivery over the past 10 years. We know that the average number of homes built every year during our time in office was 176,000, and that the figure is only 146,000 under this Government. Social housing, which was mentioned today and many times in Committee, is being built at a very limited rate. We were building more homes on average in each of our 18 years in office than Labour built in any of their 10 yearsa situation that has greatly frustrated Labour Back Benchers, as the Minister knows. In addition, homelessness among children has risen dramatically under this Government. There are twice as many homeless children as there were 10 years ago. The figure has doubled to 130,000.
	We know that there are all sorts of problems in the supply and provision of housing, but the Bill does very little to resolve them. It seeks to resolve them through more top-down managementexactly the kind of problem that got the Government into a low-level house building programme in the first place. The Bill is Whitehall driven, centralised and bureaucratic, and it gives powers to a new quango. We do not know how that quango will behave in future. The Minister mentioned earlier that Sir Bob Kerslake, the new chief executive of the Homes and Communities Agency, said that the agency would be able to act on local vision and work in a local way with local partners. That may well be true, but that is not what it says in the Bill. The problem is that despite the fact that one chief executive thinks that he can act in that way under the terms of the Bill, what matters is what is actually in the Bill and the way in which it is written. It has been written to dictate centralised targets from above to people down below.
	However one cuts ithowever one reads the Billone realises that it is about creating targets and the Government trying to drive through their famous target of 3 million homes by 2020. Never mind the fact that the Government are already missing the target that enables them to reach that 2020 target, or the fact that they have missed their targets for the past 11 years, as I described; misguidedly, they still think that the solution is to put a top-down weight on local people. What came out most clearly both in Committee andto a limited extent, because of the brevity of this debatetoday is the idea that there is a better way of doing things.
	We could work with, trust and rely on local communities by incentivising them to build the housing that we need. For some reason, the Government feel that that is a dogma that they could not possibly adopt. The idea of working with, rather than against, local peoplethe idea that people should not have to create campaigns to try to protect their local areais anathema to the Government. It does not need to be like that. We can encourage local communities to create the homes that are needed by incentivising them. We can do that by ensuring that infrastructure follows housing, and by ensuring that local communities are financially benefited as and when housing comes to an area. There must also be joined-up thinking, so that when the people in an area agree to build more housing, there is something in it for local people.
	When we ask ourselves honestly what incentive the Bill provides for local people to agree to or even encourage the building of housing in their areas, the answer is Absolutely none. The truth is that it will invariably destroy the quality of life rather than enhancing it. We do not believe that things need to be like that: housing and development should not have a bad name. It is the policies that have been followed for the past 10 years, gold-plated by the Bill, that have got us into this mess.
	What has happened in this instance is a bit like what has happened to the word consultation. Under the present Government, no one believes that a consultation is genuine. The very meaning of the wordits definition in the Oxford English Dictionaryhas been degraded by the sham consultations of the past few years. The same muddied cloud now hangs over the word development, and the Bill does nothing to address that.
	It could all be so different. Local areas could vie with each other to build sustainable housing in which everyone would want to live. Existing communities could benefit, enjoying the extra services and improving their areas by backing developments. However, the Bill does nothing to favour that approach. Instead, it looks to the heavy hand of top-down government from Whitehall. When local people object to development proposals, do you know what? The Homes and Communities Agency will have the power to override their objections. There is very little to commend the Bill to the House. We had a great opportunity to provide the amount of housing that we know we need in order to accommodate a nation, but that opportunity has been missed.
	The Minister claimed today that the purpose of all those amendments had been to take account of the will of the Committee and the House, but he was unable to answer a simple question about the number of Opposition amendments that he had accepted. in fact, the reason there were so many amendments is not that this is a tremendous Bill, but that the Minister has dithered a great deal.

Simon Hughes: On a point of order, Mr. Deputy Speaker. I seek your guidance as a result of frustration. I appreciate that this may not be a matter that you can deal with now, but four of the groups selected by Mr. Speaker for debate were not touched on at all and in one group we debated only one provision and the bulk of amendments and new clauses were not debated. In addition to taking other steps outside this place, I seek your guidance on whether it would be possible during Report, if the Government were minded to do so, to change the timetable for debate. Could a motion to change the timetable be brought forward when it was absolutely obvious, once Report stage had started, that nothing like the bulk of the work set out was going to be done? Will you confirm whether that would be acceptable, Mr. Deputy Speaker, as it would help us to understand how to deal with Bills that have so many Government amendments and new clauses appended to them in future? The Leader of the House said that she was willing to look further into that as a major parliamentary issue.

Mr. Deputy Speaker: In all these matters, the initiative lies with the Government. There may be occasions on which they may wish to put forward a different or amended programme motion before the House, but as the hon. Gentleman knows, I am afraid that that is not a matter for me. We are getting used to the procedure of programme motions and it is all a matter of judgment on each occasion as to whether sufficient timein the eyes of the whole Househas been provided for in any particular programme motion.

Banking (S.I., 2008, No. 432)

Mark Hoban: I beg to move,
	That an humble Address be presented to Her Majesty, praying that the Northern Rock plc Transfer Order 2008 (S.I., 2008, No. 432), dated 21st February 2008, a copy of which was laid before this House on 21st February, be annulled.
	The timely publication this morning of Northern Rock's business plan and accounts again calls into question the Government's decision to nationalise the bank. As one reads through the documents, the gamble that the Prime Minister and the Chancellor took by nationalising Northern Rock last month becomes clearer and clearer. Whether we get back all the money lent by the taxpayer depends on Ron Sandler's being able to turn around the business, shrink the mortgage book and rebuild the deposit base.
	Yet it has taken the Government since September to get us to this point and it took them five months to decide the future of Northern Rockfive months from when Northern Rock was offered emergency funding to the point of nationalisation and five months of uncertainty for its employees, customers and the business. Although the problems at Northern Rock were a consequence of the management's strategy, it is clear that the Government exacerbated the problem through their handling of the crisis.
	Just look at the way the Government handled the decision to provide Northern Rock with emergency funds. The announcement triggered a run on the bank, which could be stemmed only by a guarantee of retail deposits, but as the Treasury Select Committee made clear in its excellent report Run on the Rock:
	The cumulative effect was... to make the run on the deposits of Northern Rock more prolonged, and more damaging to the health of the company, than might otherwise have been the case.
	It will therefore be harder for Ron Sandler and his team to rebuild the vital retail depositor base, which will play an important role in refinancing the business on more conventional lines and also in repaying the loans to the taxpayer.

Stewart Hosie: I share the hon. Gentleman's frustration about the use of the weekend takeover as an excuse not to act earlier. I think that I share his frustration that a Lloyds TSB bid was not accepted. I certainly share the frustration of many people that the Bank of England did not increase liquidity late last summer, when it could have done so. I understand what the Opposition are trying to do with the annulment motion today, but does he not feel that, if they annul the order, it might further weaken confidence in the banking sector, which ishow can I put this gentlyrather brittle at the moment?

Mark Hoban: It would be to the benefit, because there are better solutions to Northern Rock's problems that the one before us today. We have argued that case for some time, and I shall touch on that briefly towards the end of my speech.
	To go back to the comparison with the US, Bear Stearns shareholders now have certainty over the value of their sharesunlike Northern Rock shareholders, who have to wait until the independent valuer tells them how much their shares are worth. Of course, JP Morgan Chase will pay for the compensation and buy the shares, not the US taxpayer; whereas, in the UK, the UK taxpayer will have to compensate Northern Rock shareholders for the nationalisation.
	In reality, although for some people nationalisation was the end of the story and the solution to the problem, it is not an end in itself and the publication of the business plan and accounts today demonstrates that. The two documents clearly point out the risks that the taxpayer has assumed as a consequence of nationalisation. The order transfers ownership of Northern Rock from its shareholders to the taxpayer, but it transfers the risks, too. The regulatory impact assessment published alongside the order gives no assessment of the risks assumed by the taxpayer. When the Chancellor signed off the RIA, he said that it represents a reasonable view of the likely costs and benefits, yet no numbers were attached to the RIA to back up that assertion; whereas the accounts and the business plan make plain the scale of the challenge that faces Northern Rock and therefore the risks borne by the taxpayer.
	The Chancellor in his written statement today supports the objective that Northern Rock repay its loan to the Bank of England by 2010 and release guarantees by 2011, so we know that taxpayers' exposure to Northern Rock will continue beyond the next general election. But as the business plan makes clear on page 8, the repayment of the loans by 2010 is an assumption that is part of the base case of the management's plans. I wonder whether the Chief Secretary can tell us how long it will take to repay the loans using the management's worst case scenario? The Treasury has access to the forecasts that the management prepare, so she should be able to tell us what is the worst case scenario for repaying the debt.
	Yet even the statement that the debt will be repaid by 2010 is at odds with the views of Ron Sandler, who wrote to Northern Rock customersI have here a letter that was passed to me by a mortgage holder at Northern Rockabout repaying the bank's debt in full and said:
	We aim to achieve this over the next three to four years.
	That is by 2011 or 2012a much more pessimistic assumption than the line that the Treasury has been spinning today. Can the Chief Secretary explain the discrepancy between the Treasury line put out today and the line that the man whom they handpicked to run Northern Rock has taken in talking to customers?
	Let us be clear: we want the loans to be repaid as soon as possible. We expect the Government to stand by the commitment that the Chancellor gave on 19 November:
	we fully expect to get
	the money
	back.[ Official Report, 19 November 2007; Vol. 467, c. 972.]
	However, we recognise that the changes that need to be brought about to achieve that will lead to job losses in the north-east. They will come about as Northern Rock wants to shrink its mortgage book over the next three years. In 2011, its share of the mortgage market is forecast to be about 2.4 per cent. compared with 7.5 per cent. last year, and its assets will shrink from 107 billion to 49 billion.
	To achieve that, Northern Rock customers coming to the end of their fixed terms will need to be encouraged to move to other providers. In the current circumstances, that will be relatively straightforward for customers who present a low risk, who have low loan-to-value ratios on their mortgages, or who have good credit histories. Is there not a danger, however, that the more risky customers will have to stay with Northern Rock, thereby reducing the overall quality of its loan book and exposing taxpayers to greater risk of defaultsand defaults would, of course, be a cost we would pick up? The overall quality of the loan book will deteriorate as people who cannot find an alternative are forced to stick with the standard variable rate that Northern Rock offers. Therefore, there is a risk to the value of the assets.
	Will the Chief Secretary clarify what the table on page 10 of the business plan means? It refers to net assets before fair value adjustments. Is that to do with further write-offs of structured investment vehicles, or is it to prepare us for the write-off of further Northern Rock assets? If there are further write-offs, will the taxpayer not have to pick up the tab?
	In our debates on Northern Rock, the Chancellor has always reassured us about the quality of the loan book, yet the accounts that were published today present a much less rosy picture. Northern Rock's impairment figures have deteriorated between two and three times the average of the Council of Mortgage Lenders figures for residential mortgages. The accounts also make it clear that the more aggressive approach to arrears that Northern Rock has introduced has led to a fourfold increase in the number of homes that it owns through repossession. Are the Government content with the practice on repossessions that Northern Rock has instituted?
	Despite the Chancellor's reassurances about the quality of the loan book, we see in the accounts published today a rapid deterioration in the loan book and a sharp increase in repossessions. Is the Chief Secretary prepared to reiterate the confirmation the Chancellor has given on the quality of the loans that the taxpayer has, in effect, taken on through the nationalisation of Northern Rock?
	Another aspect of the recovery planand justification for nationalisationis the proposed build-up of retail deposits from about 10 billion at the end of 2007 to 20 billion in 2011. That depends on Northern Rock's ability to rebuild depositor confidence. However, there is a challenge here, because we are now entering into a more competitive phase for deposits as a consequence of the closing off of wholesale markets to financial institutions. What assessment have the Government made of the likelihood of Northern Rock doubling its deposits by 2011, and what will be the impact on achieving the 2010 deadline if it does not?
	Will the Chief Secretary also confirm that the commitment given in the appendix to the business plan that Northern Rock will rank outside the top three in any one of the Moneyfacts retail deposits categories for the remainder of 2008 extend beyond then? One of the concerns raised when this House and the other place discussed the Banking (Special Provisions) Act 2008 was the impact that the Government guarantee arising through nationalisation could have on competition for both loans and savings. People are rightly concerned that Northern Rock might take advantage of its privileged status as a Government-backed bank to offer better rates than its competitors. Will the commitment on savings extend beyond 2008?
	The taxpayer's exposure to Northern Rock will depend not only on the loan book and the ability to rebuild customer deposits, but on the operating results of the company in public ownership. In 2007, it made a loss of 141 million. The business plan predicts that it will make substantial losses in 2008 and will return to break-even only in 2011. How much will Northern Rock cost the taxpayer over the next three years, simply in terms of its operational results? In deciding to acquire Northern Rock, did the Treasury understand that it would be loss-making from 2008 onwards?
	My next point refers back to one made by my right hon. Friend the Member for Wokingham (Mr. Redwood). The plan sets out a timetable of the repayment for the taxpayer-backed loans and releasing the guarantee, but contains nothing to indicate when either the Government or Northern Rock expect the bank to return to the private sector. Will the Minister tell us whether or not privatisation will happen as soon as the loans are repaid? Have other conditions been set that will trigger the bank's privatisation?
	Notwithstanding this evening's proceedings, the business plan is still subject to approval by the EU, and it could, of course, ask Northern Rock to revise its business plan. That could have an impact on how quickly Northern Rock's strategy would be effective in reducing the level of the taxpayer loans and so on. Will the Chief Secretary tell us when she expects to receive the Commission's approval of Northern Rock's business plan? Until that clarification is received there will clearly be an important uncertainty that affects the way in which the business is run. There are potential risks in respect of the objective that the taxpayer-backed loans will be repaid by 2010. Tonight's debate gives the Chief Secretary the opportunity to confirm, without qualification and caveat, that the taxpayer will pay not one penny towards the cost of rescuing Northern Rock, and I hope that she will take it.
	There were some unfinished pieces of business from our debate on the Banking (Special Provisions) Act 2008, one of which has now been clarified with the publication of today's accounts and is crucial to understanding the liabilities that will be assumed by the taxpayer through this Order. On Second Reading and on Third Reading some debate took place between the Chief Secretary and my Conservative colleagues and some Labour Members about Granite. It is clear that the risks associated with Granite will be borne by Northern Rock. Today's accounts make a statement about Granite:
	regarded as legal subsidiaries under UK companies legislation. This is because they are principally engaged in providing a source of long term funding to the Group, which in substance has the rights to all the benefits from the activities of the SPEs. They are effectively controlled by the Group.
	The Office for National Statistics said in its evidence to the Select Committee on Treasury that the risks and rewards of Granite accrue to Northern Rock and thus to the taxpayer.
	Does the Chief Secretary now accept that she was wrong in a response that she gave to an intervention from my hon. Friend the Member for Ludlow (Mr. Dunne) during the debate on the Act? She said:
	We have also repeatedly made it clear that the Government guarantees apply to Northern Rock and not to Granite.[ Official Report, 21 February 2008; Vol. 472, c. 631.]
	The reality of the accounts today is that the taxpayer bears the risk. The risk is not being ring-fenced, kept to one side or kept offshore. The risks and rewards of Granite accrue to Northern Rock, and they will be borne by the taxpayer.
	The other matter that we debated as the Act was going through Parliament was the framework agreement. It was deposited in the Library today, yet as Northern Rock's report makes clear, the agreement was in place from 22 Februarythe day that Northern Rock was nationalised. Can the Chief Secretary tell us why Parliament was not presented with the document earlier? Why did we have to wait until today's debate and the publication of today's accounts for the document to be placed in the Library? Is that not another example of the Government riding roughshod over Parliament?
	Although our debate focused primarily on Northern Rock, it is worth remembering that the Act enables the Government to nationalise any other bank where lender of last resort status has been given and that the taxpayer assumes an open-ended commitment without effective parliamentary scrutiny. Today's debate seeks to annul an order that had been made last month. Parliament should be given the right to approve nationalisation before it takes place, rather than debate it retrospectively. Parliament should have the power to veto these proposals, rather than be treated as a doormat by an over-mighty Executive. The Prime Minister talks about strengthening Parliament, but he undermines its authority through measures such as this.
	The publication of the accounts and business plan today makes it very clear that nationalisation is not the end of the Northern Rock story. The Government's mishandling of the Northern Rock crisis has led to the risk that taxpayers will not get back all the money we have lent to the bank. The repayment depends on the bank's ability to manage down the mortgage book and to rebuild customer deposits and the viability of the remaining business, EU state aid approval, and the state of the housing market. The Government have gambled our money on Ron Sandler and his management team, but we know it need not have been like this. As the rescue of Bear Stearns shows, private sector solutions can be found to the problems created by the credit squeeze.
	We also believe that nationalisation was not the only alternative. The Chancellor proposed that in future failing banks could be dealt with through a form of administration. We believe that that could have been the answer to the question. It would have presented a better deal for the taxpayer and the assets could have been realised in a way that protected the interests of taxpayers, rather than exposing them to ongoing continued risk until 2010-11. The Government rejected that course of action despite endorsing it for the future.
	The Northern Rock story will run on and on. Even based on today's announcement, the liability of the taxpayer will run beyond the next general election, leaving another problem for the next Conservative Government to sort out.

Yvette Cooper: The right hon. Gentleman describes what he says would have been tough love by the Bank of England in managing it through. I presume that he is talking about the proposal, which Opposition Members have described, of a Bank of England-led administration. That would effectively use powers that do not currently exist. We think that there is a strong case for introducing a new special resolution regime, and that that would be the right thing to do. However, it would involve major changes to the law and the current approach to insolvency and failing or troubled banks. It is right that such proposals should be consulted on seriously and introduced through legislation. For Opposition Members to pray in aid powers that simply do not exist on the statute book, and think that they would somehow magically come to the rescue of Northern Rock, is pie in the sky and irresponsible. They are simply not facing up to the serious problems that Northern Rock faced.
	As hon. Members know, Northern Rock's new management team has presented the Government with a detailed business plan for their approval. It details how the new board intends to repay the Bank of England's loan, release the Government guarantee arrangements and return the business to the private sector. It is based around four strategic priorities: to contract into a smaller, sustainable business, reducing the asset base; to repay the Bank of England loan by the end of 2010, while increasing the level of retail deposits, although keeping them below 2007 levels; to restructure the organisation and its operations; and to strengthen risk management in key areas. The bank envisages repaying the loan by 2010, and 2.5 billion has already been repaid since the end of 2007.
	The business plan also addresses a concern that has been widely raised about Northern Rock's business modelits excessive dependency on the wholesale funding marketsand addresses that over-reliance by reducing the size of Northern Rock's asset base and also by increasing its retail deposit base. It is important, and we have stressed throughout, that Northern Rock should not cause unfair competition in the rest of the financial markets. The business plan recognises that. Although the retail deposits will increase over the next three years, both Northern Rock's level of retail deposits and its share of the retail savings market will remain lower than at the start of last summer. The competitive framework that Northern Rock published as part of its business plan also commits it to not appearing in the top three of the best-buy tables for the rest of 2008. The framework will be kept under review and will remain subject to the requirements of the European Commission.

Vincent Cable: I shall not repeat all the arguments about the history of the nationalisation of the bank, which we have heard several times before. I simply reiterate our basic position. We believed from the outset that temporary public ownership was necessary and inevitable once the Government had made large-scale loans and guarantees, and it was certainly preferable to a bad private sale, which is what was on offer.
	On that point, I noted from several interventions from those on the Conservative Benches flattering reference to the Bear Stearns arrangement as a private sector solution. It was not a private sector solution at all. It is underwritten by $30 billion of American Government guarantees. What was impressive about it was the speed with which it was negotiated, but it was a public sector solution to a private sector problem and it remains so, albeit under private ownership. If people are looking to the United States for inspiration, the extent of the taxpayer commitment in the United States in terms of underwriting mortgage securities is far greater than any that has been undertaken in this country. We can admire the speed with which the crisis was handled, but let us not try to pretend that it was in any sense a private sector solution. It was not.
	Because of the time constraints and because we have been over the historical ground before, I shall pick up a few points which are relevant from today's information from the accounts of the company, and make some reference to the business plan, which we have in rather skeletal form, and some brief reference to the quality of the assets of the company. I agree with the point that the hon. Member for Fareham (Mr. Hoban) made. I have for a long time shared his doubts about the quality of the loan book. Now we are hearing anecdotes about it, although we have no hard and fast evidence on that subject.
	As far as the accounts are concerned, one thing to emerge clearly from the balance sheet is the very rapid expansion of lending that took place last year, from 87 billion to 99 billion. We now have that in black and white. Much of it was undertaken in the earlier part of last year; there was a rapid spurt in mortgage lending growth at the approach to the peak of the market. That, of course, is the source of all the problems that the bank subsequently got itself into.
	There is a link between that and the issue raised by the hon. Member for Hayes and Harlington (John McDonnell) in an intervention about the remuneration of the senior executives responsible for that spurt in lending, which was the source of the problem. I note that the accounts refer to the fact that Mr. Applegarth's payments are substantially less than what he would otherwise have been due on the termination of his employment. I would love to ask him what on earth he would have been paid if the thing had turned out wellhe has got 750,000, plus a cheap loan, plus a 2.5 million pension pot as reward for failure of the most abject and embarrassing kind. The Minister is right: not a great deal can be done about something that was undertaken when the bank was under private ownership and that is now subject to contractual arrangements. However, it sends the most appalling signalnot just to the work force, but to the shareholders who have lost everything. We need at least to record that.
	The other thing that the balance sheet brings out is the size of the Bank of England loan, which is 28.5 billion. It is the first time that I have seen the figure in black and white. One of the problems has been that in the past we have had to deduce the figure indirectly from the accounts of the Bank of England. It is very odd that the Bank refuses to disclose that important piece of information and that we have eventually got it in precise terms from the balance sheet of the company. That is an odd approach to freedom of information, and I hope that it will be rectified.
	The other issue, which has already been touched on several times, is the profit and loss account, the summary and the operating and financial review, and the deterioration that took place between the 626 million profit and the 167 million loss. Several items are worth commenting on. For the most part, we are talking about exceptional items. There is a very large sum127 millionfor non-recurring administrative expenses, and a large chunk of that is for professional fees. I do not know whether the Chief Secretary is responding to the debate, but if she is, will she explain the process by which the professional fees of the lawyers and advisers have translated through to the bank?
	As I understand it, the Treasury was given bills of something in the order of 75 million from the various bidding partiesGoldman Sachs and others. Some of those have been accepted and some rejected, but it seems that as much as 50 million may well have made its way to the company. It would be useful to have some reassurance that the more outrageous claims have been pruned outbecause some of them were outrageous. The largest quantitative sums were the impairment charges, which were 658 million. That sounds like an awful lot of money, but it is a great deal less than 1 per cent. of the assets. Given the doubts that are now beginning to creep in about the quality of the assets, the figure strikes me as conservative rather than very large.
	A second set of questions relates to the business plan. The hon. Member for Fareham made the right points on that: there is clearly a tension between the attempts to get taxpayers' money back as quickly as possible and preparing the company for eventual sale. If the two objectives are not in direct competition, they are certainly in tension. I understand that the current management are redeeming mortgages and realising cash from that, and also trying to sell them on to other banks; inevitably, the better-quality mortgages are being sold on. That raises the issue of whether the latter stages of the repayment of the taxpayer will be achieved. The question that we need to answer is about not merely whether there is a general commitment to repay the taxpayer by 2010, but what the specific staging posts are, and how much we can expect to be repaid and when.
	The third set of points relates to the quality of the assets. My understanding of this has advanced a little since our previous debate, much of which centred on Granite. There was concern that the Granite mechanism potentially transferred into the Granite vehicle the bank's better-quality mortgages. When I talked to the new chairman about thisI think it is public knowledge and I am not breaching any confidentiality in the conversationhe sought to reassure me that there is a computer model at the bank that ensures that the mortgages that go into Granite are chosen entirely at random, so they are a mixture of good and bad. If so, there may well be problems with Granite but they will not result in the sort of cumulative impairment that we were worried about. None the less, there are clearly problems with many of the mortgages that were advanced last year, and I would expect the repossession problem and the difficulties flowing from that to get progressively worse over the next year or so.
	Let me say a little about a controversial matter. Several of us have had e-mails during the day from shareholders who see this transfer order as a mechanism for raising again the issue of compensation. I support the Government's view that the argument that there needs to be some kind of fair settlement in the direction of generous compensation is unrealistic. The simple fact is that the valuation of the shares before nationalisation was based almost entirely on artificial Government support, and it is unrealistic to expect substantial compensation in those conditions. The hon. Member for Fareham talked about the helpful certainty of the Bear Stearns compensation. I am sure he followed that as closely as I did, but my understanding was that the shareholders were offered about 2 per cent. of the value of the shares and, after a lot of negotiation over a two or three-day period, that was increased to about 10 per cent. However, it was virtually wiped out. It is unrealistic and unfair to imagine that such rescues can be accompanied by generous compensation of shareholders.
	Last week, we had an indication of continuing problems in the financial markets. This is clearly not just a Northern Rock problem; many of the other banks are rocky as well. As has happened in the United States, we will get continuing pressure from the rest of the banking system for the public sector to take over the risks and for it to retain the potential upsides of any improvement. The Governor of the Bank of England is under a lot of pressure from the City and financial commentators to take over poor assets and poor mortgages in return for liquidity. He is absolutely right to take a strong line on that. I believe that the Bank of England's position has changed slightly and it is now willing to accept mortgage assets in return for liquidity while insisting that they are of very high quality.

Richard Spring: This afternoon, there was an announcement on the home page of the Northern Rock website saying:
	Due to essential maintenance, access to our Tracker Online and Silver Savings Online services will be unavailable between 20:00 and 21:00 hours today, Monday 31st March. We apologise for any inconvenience this may cause.
	We can only hope that that was not a bad omen of what lies before us. It does not bode well on the very day that Northern Rock is putting its best foot forward, announcing its business plan and setting out its future, with much publicity surrounding its full-year results for 2007.
	In view of Northern Rock's declining mortgage book, the order before us deals with the transfer of shares to the Treasury solicitor, the possible hiring and firing of directors, and administrative changes surrounding shares. I want specifically to consider the regulatory aspect of this exercise, because that is at the heart of the problem. Section 2 of the Banking (Special Provisions) Act 2008 requires the Treasury to consider the desirability of making the order for two reasons. The first is to protect
	the public interest in circumstances where financial assistance has been provided by the Treasury to the deposit-taker for the purpose of maintaining the stability of the UK financial system.
	The other is to maintain
	the stability of the UK financial system in circumstances where the Treasury consider that there would be a serious threat to its stability if the order were not made.
	That is the exact point made by the Chief Secretary, and it is the heart of what is before us this evening.
	In a letter sent to MPs by the chief executive of the Financial Services Authority, the internal audit identified a number of key failings. Before we can agree to any order, therefore, we have to be satisfied that the arrangements will be satisfactorily monitored by the FSA. I should add in passing that Northern Rock will not be a publicly owned company for the purposes of the Freedom of Information Acta key element in the whole Northern Rock picture. After the regulatory failure of Northern Rock as a public company, is the Minister satisfied that there will be adequate resolution of that issue by the FSA with regard to Northern Rock in its new state? It is worth remembering that the reliance on wholesale markets helped to bring Northern Rock down when banks became reluctant to lend to each other.
	The interest rate offers on the website that I mentioned are pretty generous. Despite the modifications to the business plan, we must consider what is happening in the marketplace today. For example, LIBOR, which is the interbank lending rate, is back over 6 per cent.its highest level since 27 December. That indicates the real nervousness among financial institutions, despite the additional liquidity provided by the Bank of England. In the build-up to the situation that confronted us, we saw the failure of the tripartite system introduced by the Prime Minister. Given the poor regulatory performance of the FSA, what assurances can we get that it will meet regularly and monitor lending and borrowing practices carefully? Given the clear illiquidity I referred to in the wholesale marketsand there is real pressure out therewill the FSA work closely with the Bank of England? There is no easy divide between liquidity, compliance and solvency. Last summer, the FSA presumed that the Bank of England would provide sufficient liquidity to bail out failing banks. We have to see the order in that context.
	As far as Bear Stearns is concerned, it is not a question of it being some sort of pure exerciseI refer to the comments of the hon. Member for Twickenham (Dr. Cable). Of course, a credit facility was provided by the Federal Reserve, but the real point is not so much the way in which Bear Stearns was handled by the Federal Reserve, but the speed of the action. That was the key.

John Redwood: It was a great pity that the Chief Secretary decided to devote so much energy to rather silly and clumsy partisanship and to claiming that we do not have any better ideas about how to tackle the position, instead of doing what the House expected of her and telling us a little about the challenges and difficulties that lie ahead if the business stays in the public sector. It probably will if we are unsuccessful in persuading the Government otherwise.
	The Chief Secretary constantly asks, What was the other option? There was an easy other option, for which I have argued throughout the crisis, from when it broke in the summer. Of course, the Bank of England had to step in when there was a run and act as lender of last resort. However, the Bank of Englandand, if necessary, the Treasury, working with itshould subsequently have been the intelligent bank manager of the business. It had a natural relationship with Northern Rock as its banker.
	As a banker, it could have taken all the collateral it needed to ensure that taxpayers' money would never be at risk. It could have guided and influenced the business plan so that it had an impact on phasing the repayments and the way in which they would be made. It did not have to take over the bank's ownership, with all the other liabilities and risks. It did not have to take responsibility for the staff or future trading. It should have concentrated on lending the least amount needed to get the bank through the immediate problem, and having the best possible security for the taxpayer and the best possible supervision and management overlooking the board, as a bank manager should do, to ensure that the money would be repaid in good time. That was the obvious thing to do.
	The problem with the current model is that the Government are trying to do two contradictory things. Of course, the Chief Secretary is right to tell the House that she views getting back the 24 billionthe remaining outstanding loan, we were told tonightas an urgent priority. I suspect that she can do that and I wish her every success. We all represent taxpayers and it is important that we get the money back. It is also important that the Bank of England get its money back as quickly as possible because it is a small bank trying to deal with a large and complex system. All the time that it is so committed to Northern Rock, it does not have the firepower that it needs to deal with the obvious imperfections and difficulties in the money market.
	How can we get the money back? The Government and the bank's recently appointed management admit that the money will be repaidwe trust in reasonable timeby squeezing the business, perhaps halving it, getting people to repay their mortgages early because they remortgaged with someone else and making sure that new advances are not made through Northern Rock to replace advances that are maturing as people pay them off, so that business can be transferred to other organisations in the financial world, and some of the assets can perhaps be sold on, as appropriate.
	That is a perfectly good working model for getting the Treasury money back, but it is not what the owners of a bank would be doing if they were trying to sell it on to someone else for maximum value. Indeed, doing so will diminish the value of the assets under control, because the bank will have to battle constantly to cut its costs, by sacking its staff and reducing its administrative overheads, to bring it closer to the reality of the falling revenue. Instead of having one or two years of rising profits before returning the business to the private market, which would be best for securing a good price, we have been told tonight that it will definitely have three years of losses. We know, too, that it will have a much smaller business, so it will be quite difficult for it to explain how it can suddenly turn all that round.

Philip Dunne: I readily agree that the overall book has increased substantially, which means that all categories of loan have increased. My point is that the risk of the book has increased significantly over the yearand this is the book that the Chancellor keeps telling us is of very high quality. The least-high-quality lending has risen by nearly 2.5 billion, and that is the part that is most at risk, not least given what is happening in our present housing-market environment.

Philip Dunne: I am very grateful to my right hon. Friend for reminding me of that. Indeed, the unsecured lending book is of the order of 7.7 billion as at the end of 2007 and the impairment charge was in excess of 200 million, much of which was secured against that portfolio.
	Hometrack, which provides one of the widest analyses of the housing market, published some statistics today confirming that we have entered the sixth month in a row of declining house prices. The increase in high-risk residential mortgages places a sharper focus on the Chancellor's confidence that the book will be good and that taxpayers' money will be secure. I wish I could share his confidence.
	In an earlier discussion of the possible consequences of administration, the Chief Secretary referred to its leading to fire sales of assets. Of course, we have been in a state of uncertainty over this company since mid-September, and the company has successfully sold a portfolio of assetsits commercial loansfor a premium over the book value at a time of considerable uncertainty for the company as a whole. That firmly demolishes the argument that an administration would have somehow made it more likely that losses would have been incurred on the sale of the loan portfolios. Good assets will sell for a good price in these circumstances irrespective, as has just been proven, of whether the company is in distress.
	That brings me on to my main point, which also comes out of a reading of the accounts. Much was made in earlier debates about Granite of whether or not the business plan will feed the beast. Enough has already been said about that this evening. However, Northern Rock established another financial vehicle, which has not been referred to in previous debates. I refer to the Saphir Finance vehicle, a special purpose vehicle, which issued 400 million in tier 1 notes; they were issued against the 400 million of preference shares issued by Northern Rock. The preference shares were provided as collateral to the holders of the notes issued by Saphir Finance.
	The preference shares in Northern Rock, given that they are preference shares, rank ahead of all the ordinary shares, including the ordinary shares to which the foundation trust shares will be converted through the transfer order. Oblique reference is made in the order to the preference shares, but I would ask the Chief Secretary, even in the few minutes remaining in our debate, to help us to determine whether in the compensation payments made to shareholders of Northern Rock, if there are any, the Government will observe the traditional capital ranking rights of securities and ensure that preference shareholders are paid out in preference to ordinary shareholders. I am not sure whether she is able to give us that assurance now. I am more than willing to give way to her [Interruption.] She indicates that she is not in a position to do so, so perhaps she will be kind enough to write to me [Interruption.] Once again, she is not indicating either way.

Philip Dunne: She will be happy to write to me about that. I am very grateful because the issue is causing concern outside this place. Given the lack of information about how the Government intend to implement the transfer order and compensate shareholders if any compensation is due, if the Government choose to ignore the standard ranking of securities, it will blow another hole in the confidence of financial institutions in the Government's respect for the ordinary workings of the market. I am not arguing that preference shareholders should necessarily receive anything, as that will come down to a judgment on what compensation should be paid at all; but if any compensation is due, it is due first to the preference shareholders, and if that does not happen, I would urge the Chief Secretary to think very carefully, as it will raise ripples right across the financial sector. The House will be pleased to hear that that brings me to my final point.
	My right hon. Friend the Member for Wokingham asked a question about the business plan objectives that are set out quite succinctly in the annual report, both in the executive chairman's statement and in the operating financial review, where the company's objectives are referred to as, first, the repayment of the Bank of England debt; secondly, the release of Her Majesty's Treasury's guarantee; and thirdly, a successful return of the company to the private sector. Where within those objectives sits the priority donation out of incomeby the way, the company is generating none at the momentof 15 million to good causes? Of course, we would all like to give plenty of money to good causes, but it is not within the company's objectives. The company is not generating a profit at the moment, so out of what pot of reserves will it make such a payment for 2007 and subsequent years if profits are not made?

Mark Hoban: We have had a very full debate on the order. I was a little disappointed in the Chief Secretary's speech. I expected that she would set out very clearly the rationale for the Government nationalising Northern Rock, that there would be some substance to her arguments and that we would not have to rely on the vague assertions that this represents a better deal for the taxpayer, without some information to prove that that was so. She gave us no comfort on the quality of assets that the taxpayer will acquire. Northern Rock's payment ratios are deteriorating faster than those of the industry as a whole. She gave us no comfort that taxpayers would get all their money back. She said that this was the best deal possible, without providing the substance to demonstrate that it is the best deal possible.
	On the specific losses that Northern Rock will incur in 2008, 2009 and 2010, despite being presented with the opportunity to give the House the figures, the Chief Secretary sought to avoid giving the House and the taxpayer that information, despite the fact that the Treasury must know what the figures are. The Treasury has access to all the financial information that supports the plan, and I am disappointed that she chose not to share those figures with the House, because that indicates that a significant loss could occur over the next three years. Ron Sandler refers to a substantial loss. The taxpayer would be right to be concerned about their exposure going forward as a consequence of the transfer order before us. The Chief Secretary talks about there being no alternative, but the reality is that the Government have yet to prove the case for nationalisation, have yet to make the substantive arguments that this House deserves to hear, and have yet to be fulsome in disclosure of information about Northern Rock's financial position going forward in their forecasts and projections. They are just hoping that the money will be repaid by 2010. Even Ron Sandler is not giving Northern Rock customers that same degree of assurance.
	That is why we will pray against the order. We believe that the taxpayer has been exposed to significant risk as a consequence of the way the Government have handled the fallout from Northern Rock, and the Northern Rock situation over the past six months. The taxpayer deserves better answers than they have had tonight from the Chief Secretary.
	 It being one and a half hours after the commencement of proceedings, Mr. Deputy Speaker  put the Question , pursuant to Standing Order No. 16 (Proceedings under an Act or European Union Documents) and Order [26 March.]

Liam Byrne: I am grateful for the opportunity to respond to tonight's Adjournment debate. Sometimes in debates about immigration, I think that there is a great deal of consensus in all parts of the House that is sometimes not revealed or seen in the public domain. Tonight may be another example of the consensus between us being greater than the things that divide us.
	The right hon. Member for Haltemprice and Howden (David Davis) mentioned a specific case in his constituency, but it raises wider points of policy, as he said, which will command the attention of the House both this evening and, I hope, in months to come. I thank him for the courteous and careful way in which he has made representations to me over the past few months.
	I congratulate the  Hull Daily Mail on championing the case. I have not always agreed with the direction of its editorial policy, but judging by some e-mails that I received this afternoonfrom the right hon. Gentleman's constituents, I thinktelling me that many local people disagree with the  Hull Daily Mail, it is doing something that it feels is right even if it is not popular with all sections of its readership.
	I wish to delineate two issues: the way in which decisions are made, and why they are made. Those are the wider policy issues to which the right hon. Gentleman alluded. I shall conclude by proposing a way forward. The basic chronology of the case is a matter of agreement between us. As the right hon. Gentleman said, Deborah Phillips was born in the United States and spent the first years of her life there. She came to the United Kingdom and spent a considerable period of her childhood and early adulthood here before returning to the United States. In other words, although she was educated in the UK, she built her life in the United States, in the services and then, I think, in business. I believe that her brother remains there.
	I first wish to set out how decisions are taken. It is often forgotten in the public debate that it is rarely Ministers who make such decisions. The decisions are taken by independent Crown civil servants and, often, independent immigration judges. In this case, the right hon. Gentleman's constituent failed in her appeal to the asylum and immigration tribunal in December 2006. The judge found that:
	The situation as between mother and daughter
	was not
	so exceptional that to deprive her of the right...to live with her mother would place this country in breach of its obligations under Article 8 of the Human Rights Convention.
	In reaching its finding, the AIT held that Miss Phillips's mother was financially independent and could afford to pay for her own care, that her mother had travelled to the United States in 2006 for an operation, and that Miss Phillips had a brother in the US. That is simply a summary of some of the things that the judge said.
	I do not think that when judges make decisions of such force and clarity the House would want Ministers overturning them left, right and centre. The question that we must turn to is whether the framework within which the judgment was made was not quite right, and whether justice demands a different solution. In this case, as the right hon. Gentleman set out, the question is whether the framework of the British Nationality Act 1981 and its amendments is quite right.
	Before 1983, British women were unable to pass on citizenship, but there was discretion in the British Nationality Act 1948 to confer citizenship on any minor by registration. That was why Merlyn Rees, when he was Home Secretary, said on 7 February 1979 that he would exercise discretion in favour of any minor of a UK-born mother who applied for registration before his or her 18th birthday. In other words, that concession would benefit anybody born after 1961, as long as they registered before their 18th birthday.
	In the Nationality, Immigration and Asylum Act 2002, this Government widened that concession through an amendment to the 1981 Act, which meant that people could register after the age of 18. The nub of the argument was that there may well have been children in some parts of the world who were unaware of the proceedings of the House of Commons, incredible as that might seem. New section 4C was introduced and added on Third Reading in the Lords without dispute.
	However, the problem in the right hon. Gentleman's case is that the provision does not help Ms Phillips, as she was born before 1961, in 1959. That issue was addressed by Lord Filkin in 2002, when he said:
	British women did not acquire the right to pass on their citizenship until 1983. One can only go so far towards righting the wrongs of history before the number of 'what ifs' to be taken into account becomes unmanageable.[ Official Report, House of Lords, 31 October 2002; Vol. 640, c. 295-6.]
	Any geographical or time limitation in the new registration provision would have produced hard-luck cases. At the time, the Government felt justified in drawing a line around people who, had they applied in time, would have been registered as citizens under the terms of the policy in 1979. Nevertheless, the Government accept that those born to British mothers before 1961 are at a disadvantage, so I can confirm that we shall seek to bring forward a legislative remedy at an early stage, perhaps in the immigration reform Bill we have already proposed.
	Ms Phillips is one of the hard-luck cases referred to by Lord Filkin, so the question for us is whether there is a unique combination of factors that warrants leave outside the rules. The right hon. Gentleman pointed out that there is probably only a limited number of people in that category; none the less it is important to look first at whether there are particular extenuating circumstances, and in this case I believe there are.
	Many of those circumstances could come under the existing carer's concession in the immigration rules. It allows Ministers and caseworkers to exercise discretion, and in compassionate circumstances a period of leave of up to 12 months can be granted. I think that that would be appropriate in this case because of a combination of factors that include the following: first, Ms Phillips's role as her mother's full-time carer; secondly, Ms Phillips's inability to apply for citizenship, as a result of the legislation that I propose soon to amend; thirdly, the length of time of Ms Phillips's residence in the UK; fourthly, the ties that Ms Phillips's daughter has built up during their four years' residence in the UKas the right hon. Gentleman told me last week, and confirmed today, her daughter is in school in the UK; and finally, and perhaps most important, the news that the right hon. Gentleman conveyed to me about Deborah Phillips's mother's condition and the role that Deborah Phillips wants to take as her carer.
	The combination of those factors points to a requirement on me to exercise discretion in this case, so it is appropriate to grant leave of 12 months, exceptionally, outside the rules.